Étude exploratoire du suivi des investissements réalisés dans le secteur traditionel par les sociétés de capital de risque
Nomo, Théophile Serge
SubjectFollow-up and involvement
Corporate financing is very important for all parties involved in the financial market. Venture capital is one of the sources of financing SMEs, and its main characteristic is the active partnership offered by venture capital professionals (VCs) to entrepreneurs. However, this active involvement has not been very fruitful. In the period from 2002-2004, the venture capital industry in Québec generated low or even negative earnings. This situation has led VCs to question not only their selection practices, but also their investment monitoring practices. In addition, recent academic and professional publications have highlighted the importance of the post-investment phase in value creation for partner companies. This research explores the ways in which VCs monitor their investments in order to better understand how this monitoring contribute to the value creation process for their partners companies. In fact, the key question in this research is as follows: how can VC professionals improve their investment monitoring practices so that they can contribute to the success of partner companies by optimizing their formal and informal relationships? The purpose is to clarify the types of post-investment monitoring done by VCs through the studies of their professional's activities. The research findings lead to an investment monitoring framework. This framework comprises of the following key activities: relational dynamics, follow up and involvement . These three overlapping activities facilitate the creation of added value to investments and, to an extent, lead to the generation of better rate of returns. They rely on the complementarity and coexistence between the logical approach and the socio-political approach throughout the entire investment monitoring process.