Venture capital optimal investment portfolio strategies selection in diffusion - type financial systems in global capital markets with nonlinearities

Ledenyov, Dimitri O. and Ledenyov, Viktor O. (2013): Venture capital optimal investment portfolio strategies selection in diffusion - type financial systems in global capital markets with nonlinearities.

Abstract

The condensed research article presents some innovative research results on the venture capital optimal investment portfolio strategies selection in the diffusion-type financial systems in the imperfect highly volatile global capital markets with the incomplete information, which are characterized by the asymmetric information flows and impacted by the various types of the nonlinearities. We discuss the venture capital firms with the different organizational structures: the corporation funded venture capital firm, investment bank funded venture capital firm, private equity funded venture capital firm, state funded venture capital firm. We consider the complicated issues on the venture capital optimal investment portfolio strategies selection, evaluation of the possible returns on the investments, and implementation of exit strategies for the venture capital investment schemes. We propose that the information signals can be mixed and self-modulated during the asymmetric information flows in the information transmission channels between the market agents, resulting in the origination of the various types of the nonlinearities, which may have a considerable impact on the venture capital investments in the diffusion-type financial system. These nonlinearities have to be taken to an account during the venture capital optimal investment portfolio strategies selection process, which is all about making the right investment choices with the application of the inductive, deductive and abductive logics. In our opinion, the State of Queensland is a very attractive place to make the venture capital investments in the hi-tech startups, comparing to other regions in the World. We conclude with the notion that the venture capital industry can greatly improve the macroeconomic indicators of national economies, creating the new hi-tech industries, generating the abundant wealth, and increasing the Gross Domestic Product.

• Item Type: MPRA Paper
• Language: English
• Keywords: venture capital concept, venture capital fund, venture capital investment portfolio and strategy, corporation funded venture capital firm, investment bank funded venture capital firm, private equity funded venture capital firm, state funded venture capital firm, entrepreneurship, theory of firm, wealth creation, econophysics, econometrics, nonlinearities, asymmetric information flows, mixing and modulation of information signals, diffusion-type financial system, imperfect highly volatile global capital markets with incomplete information
• Subjects: C - Mathematical and Quantitative Methods > C0 - General > C01 - Econometrics; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C58 - Financial Econometrics; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information ; Mechanism Design; F - International Economics > F6 - Economic Impacts of Globalization > F61 - Microeconomic Impacts; F - International Economics > F6 - Economic Impacts of Globalization > F65 - Finance; G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions; G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; G - Financial Economics > G1 - General Financial Markets > G17 - Financial Forecasting and Simulation; G - Financial Economics > G2 - Financial Institutions and Services > G23 - Non-bank Financial Institutions ; Financial Instruments ; Institutional Investors; G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking ; Venture Capital ; Brokerage ; Ratings and Ratings Agencies

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