Cookies help us display personalized product recommendations and ensure you have great shopping experience.

By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
SmartData CollectiveSmartData Collective
  • Analytics
    AnalyticsShow More
    sales and data analytics
    How Data Analytics Improves Lead Management and Sales Results
    9 Min Read
    data analytics and truck accident claims
    How Data Analytics Reduces Truck Accidents and Speeds Up Claims
    7 Min Read
    predictive analytics for interior designers
    Interior Designers Boost Profits with Predictive Analytics
    8 Min Read
    image fx (67)
    Improving LinkedIn Ad Strategies with Data Analytics
    9 Min Read
    big data and remote work
    Data Helps Speech-Language Pathologists Deliver Better Results
    6 Min Read
  • Big Data
  • BI
  • Exclusive
  • IT
  • Marketing
  • Software
Search
© 2008-25 SmartData Collective. All Rights Reserved.
Reading: In defense of Venture Capitalism
Share
Notification
Font ResizerAa
SmartData CollectiveSmartData Collective
Font ResizerAa
Search
  • About
  • Help
  • Privacy
Follow US
© 2008-23 SmartData Collective. All Rights Reserved.
SmartData Collective > Big Data > Data Mining > In defense of Venture Capitalism
Data Mining

In defense of Venture Capitalism

Editor SDC
Editor SDC
3 Min Read
SHARE

Critics of private equity claim that compensation is greatly exaggerated for them, that they are risk averse, and invest only in sure shot companies , and exploit almost like  a cartel the need of the entrepreneur for capital ( http://bits.blogs.nytimes.com/2009/01/28/maybe-we-should-call-them-venture-pessimists/ )
Well here is some data for this type of financing.Here is a paper in […]

Critics of private equity claim that compensation is greatly exaggerated for them, that they are risk averse, and invest only in sure shot companies , and exploit almost like  a cartel the need of the entrepreneur for capital ( http://bits.blogs.nytimes.com/2009/01/28/maybe-we-should-call-them-venture-pessimists/ )

Well here is some data for this type of financing.Here is a paper in the National Bureau of Economic Research (http://www.nber.org/papers/w14331.pdf)

More Read

With Data Mining you can even scare Walmart…
Privacy in Behavioral Targeting: Poll Results
Big Data and Social Marketing – A Match Made in Heaven
Where in the World Does All this ESRI World Data Come from?
DIALOG Keynotes – ILOG and IBM

The following extract sums it all.-

 

Leslie and Oyer examine 233 U.S. companies that either underwent a leveraged buyout (LBO) between 1996 and 2004 and then completed an initial public offering (IPO) before the end of 2005 or went private between 1998 and October 2007 (and about which there is compensation data available). They supplement that data with interviews of half a dozen experienced executives at private equity firms. They find that since 1996 the highest paid executive in a privately owned firm earned about 12 percent less salary, but got 3.3 percentage points more company equity and 12.6 percent more of his cash compensation through bonuses and other variable pay, than the CEO of a public corporation. And, they claim that it’s not just the CEO who got this treatment: the 20 to 80 top managers typically also got significant equity in the company.

"A very important aspect of the equity programs is that managers are required to contribute capital — managers purchase the equity with their own personal funds," they write. They say that their study is the first to document the changes in management incentives in private buyouts since 1990, when the PE landscape was far different. The impact of these incentives is less clear, however. "While the incentives given to PE-owned firms’ managers keep their companies operating at average levels of profitability and efficiency, we do not find evidence that they create significant excess profits," the authors conclude. In only one category they measured – sales per employee – did private-equity ownership have a significant positive effect. 

It does seem clear the VC or PE funded companies get more productivity because it is their money on the line not some anonymous share holder or pension fund. The current scenario is a great time to buy for Venture funds– and for us to wait and anticipate for the next Google to emerge.

Ajay-

Upcoming Interviews

Open Source-

Data Mining Solutions (Featured Company)

Predictive Analytics-

SAS products

Internet-

BI Dashboards

Share/Save/Bookmark

Share This Article
Facebook Pinterest LinkedIn
Share

Follow us on Facebook

Latest News

sales and data analytics
How Data Analytics Improves Lead Management and Sales Results
Analytics Big Data Exclusive
ai in marketing
How AI and Smart Platforms Improve Email Marketing
Artificial Intelligence Exclusive Marketing
AI Document Verification for Legal Firms: Importance & Top Tools
AI Document Verification for Legal Firms: Importance & Top Tools
Artificial Intelligence Exclusive
AI supply chain
AI Tools Are Strengthening Global Supply Chains
Artificial Intelligence Exclusive

Stay Connected

1.2kFollowersLike
33.7kFollowersFollow
222FollowersPin

You Might also Like

How hotels are using data to generate new revenue

9 Min Read
Data ManagementData MiningData Quality

The Data Is In: Finding Affordable Car Loans

5 Min Read

5 ways to reduce cost with predictive analytics

6 Min Read

Big Data in the Sports Industry

7 Min Read

SmartData Collective is one of the largest & trusted community covering technical content about Big Data, BI, Cloud, Analytics, Artificial Intelligence, IoT & more.

AI and chatbots
Chatbots and SEO: How Can Chatbots Improve Your SEO Ranking?
Artificial Intelligence Chatbots Exclusive
ai in ecommerce
Artificial Intelligence for eCommerce: A Closer Look
Artificial Intelligence

Quick Link

  • About
  • Contact
  • Privacy
Follow US
© 2008-25 SmartData Collective. All Rights Reserved.
Go to mobile version
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?