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Venture Capital – An Option for Financing Latin America’s SMEs

28 May 2003

Latin America and the Caribbean (LAC) have undertaken considerable reforms during the late eighties and early nineties. However, notwithstanding those reforms, the region has not matched its potential with competitiveness, growth and economic performance. Despite the region’s efforts to increase its participation in the global economy, the region falls short in its share of the world’s export of goods and service. The thirty-three countries in LAC represent 8.2% of the world’s GDP and 8.4% of the world’s population. However, in terms of exports, the region represents only 4.7% of the world’s exports, slightly more than half its pro rata share. Given the wealth in natural resources the region should be a major exporter, not only of those very resources, but of their derivative manufactured goods. Similarly, in terms of agriculture, LAC can be and may eventually become the bread basket of the world, giving rise to many agro-industrial opportunities, which have up to now been mostly untapped. The region’s work force, which the immigrant pool in the United States has proven, is an industrious, willing and energetic source of labor. LAC’s demographics are quite favorable: it is young with a small portion of its population of retirement age and a decreasing percentage below working age. The region’s strong labor pool should also have permitted the region’s economy to grow more rapidly.

Historically, in any period, developing countries have outpaced the growth of advanced economies. But Latin America has been a drag on the performance of emerging markets since the beginning of the eighties. During the ten year period 1984-93 (in real terms), advanced economies grew at 3.2% while developing countries grew at 5.1%. LAC turned in a meager 2.9% of growth, ten percent lower than developing countries. From 1994 to the present the same scenario existed: advanced countries grew by 2.7% lagging developing countries that grew at a healthy 5.2% rate. During the same period, the region grew at a dismal rate of 2.5%. It has been more than two decades since developing countries as a group lagged advanced economies in GDP growth. But LAC’s growth in six of the last ten years trailed that of advanced economies.

Many reasons have been advanced for this paltry performance: geography, culture, climate, education, religion, institutions, infrastructure, demographics, values and the list can go on. While some of these enumerated factors may indeed complicate the region’s ability to match potential with performance, one of the contributing factors to Latin America’s underperformance is the inadequacy of its capital markets and the unsuitability of its institutions to promote broad based growth.

The measure of any capital markets is its ability to promote optimal savings and allocate that savings efficiently to productive enterprises maximizing growth and equitably distributing the resulting wealth. The absence of any one of these measures handicaps a country’s ability to realize its potential. In the case of LAC no one would suggest that any of these factors are present. The region produces insufficient savings to meet its investment needs. The allocation process has impeded growth and produced a horrid distribution of wealth.

LAC has failed to encourage innovation and develop sufficient new small and medium business ventures to grow and provide full employment. It must be asked whether the financial infrastructure of the region is not in part responsible for these failings. Recent developments in the United States indicate that providing the appropriate environment and structure leads to growth and stimulates the development of new industries, technology, products and services.

The number of formidable companies that have developed in the Silicon Valley as a result of venture capital raises a question as to whether there is a model that can be adopted by LAC to promote growth. It is noteworthy that the likes of Sun Microsystems, Cisco and Intel, to name but a few, are the direct result of the financing received from venture capital funds. It would be tempting to suggest that the existence of venture capital funds in and of itself leads to the creation of new industries and great innovations and remarkable product break-throughs. Obviously this is nonsense. A venture capital industry which can lead to the creation of an Intel requires a myriad of preconditions, and assumes an underlying industrial base and a legal and regulatory infrastructure which do not exist in the region, not even in Brazil or Mexico. Nonetheless, the venture capital model can be used in LAC for other purposes and in distinctly different environments to produce enterprises that are suited for the economies of the region. While every country may wish to create its own Intel from scratch, it is fantasy to believe that such will be forthcoming simply by instituting legal reforms which promote the development of a venture capital industry.

Definition of Venture Capital

There is no universally accepted definition of venture capital. In the United States it consists of the investment by a specialized financial organization in high growth, high risk enterprises which are in early stage of development and are in need of equity, and specialized advice and direction. In Europe venture capital is much less differentiated. There, any firm dedicated to providing risk capital is considered to be engaged in venture capital. Any private equity provider or mezzanine financier in Europe providing risk capital to seed stage, start-up phase, early growth, or expansions in a high risk enterprise is considered a venture capital operation. Venture capital in Europe even extends to the financing of management buyouts.

For purposes of this paper, venture capital in the LAC context means any high risk equity capital 1 operation which combines financing and a substantial amount of value added services and control.2 The needs of LAC for the combination of equity and value added services such as are provided by consultants makes this definition of particular value for the development of industry and promotion of regional economic growth.

History of Venture Capital

Private risk capital, as opposed to today’s venture capital, has a long history. Exactly when the activity was born will probably never be precisely identified. The discovery of LAC was itself a venture capital operation in which Christopher Columbus received capital to finance the opening of new business trading routes to China. Arguably Columbus may well have been the most successful venture capital operation in economic development terms in history. This financial support received had much of the same characteristics as what is today considered venture capital: an enterprising sea captain with an idea, searching for capital and a willing investor. For his efforts Columbus would be entitled to a percentage of the profits derived from the voyage and all future trade with the Indies. In turn the venture capitalists, Ferdinand and Isabela, would receive a substantial part of the revenues derived from the expedition and all future revenues. The missing element was the existence of a blind pool funded from various sources and managed by a professional investor. Nonetheless, there is some irony in that we are today discussing how to bring to LAC the same risk taking and business development tools which led to the region’s discovery and colonization.

Venture capital in the United States is the product of the evolution and marriage of merchant banking and professionalized investing by high wealth individuals.3 In 1958, in recognition of the value that private equity financing played in promoting new ventures and stimulating growth and employment, the United States government passed the Small Business Investment Act. A quarter of a century earlier the importance of governmental support for business development prompted the New Deal to create the Reconstruction Finance Company, which ultimately led to the establishment of Alcoa and the synthetic rubber industry. The formation in 1956 of the International Finance Corporation, part of the World Bank Group, was also an attempt by the international community to provide venture capital in support of private sector activities promoting growth and development in the developing regions of the world.

By the early 80’s the United States had formed a recognizable venture capital industry, albeit small 4. It is estimated that a mere $610 million was invested by venture capitalist in 1980. In the span of a decade that sum grew four fold and yet another four fold in the following eight years, reaching $12.5 billion in 1998. The number of companies receiving financing followed a parallel development increasing from 504 in 1980 to 1824 in 1998.5

The United States has a stock market-centered capital market, unlike Europe and LAC, which have bank-centered capital markets. The reasons why a stock market-centered capital market evolved in the US are numerous 6: the size of the country, the Glass-Stegall Act (which forced a break-up of bank-dominated financial intermediation), a supportive common law jurisdiction, “path-dependent evolution” and a variety of other factors.

There is a symbiotic interdependence between the growth of venture capital and the innovations and discoveries arising from Silicon Valley and Route 128 corridor in Massachusetts. The commercialization of the products developedin these two vibrant university-linked centers is clearly a function of the availability of venture capital resources capable of translating ideas into economically successful business operations. A significant part of the economic efficiencies that produced the U.S. growth of the nineties is a result of the ideas born in Silicon Valley and their ultimate commercialization, both of which werepossible by venture capital.

The European Union has recognized the value of venture capital in creating a supportive environment for generating new industries and providing employment growth particularly in high tech areas. In 1998, the Commission of the European Communities adopted a Risk Capital Action Plan (RCAP) aimed at promoting a European approach to venture capital. In its report, “Risk Capital: A Key to Job Creation in the European Union”, Europe recognized that it had fallen significantly behind the U.S. in job creation in the industries spawned by the new economy. Nonetheless it would be wrong to assume that Europe had no venture capital industry prior to 1998. The industry was embedded in the bank-centered, financial intermediation system which dominates the European Community. Europe has undertaken to address its lack of a venture capital industry through the RCAP. Indications are that major progress has been made in the last three years. Venture capital operations, which in European terms consist of seed, start-ups, expansions, and corporate restructurings, grew by 96% between 1999 and 2000, increasing from 0.14% of GDP to 0.23%. More importantly seed and start-up investments grew by 115%, surpassing the total investments in all aspects of venture capital investments two years earlier. 7

Europe has been equally successful in promoting an increase ininvestmentby institutional investors in venture capital funds. In 1999 11.5 billion euros were raised to support the industry and another 20 billion euros were raised in 2000, a dramatic increase reflecting the importance the community has placed on stimulating the growth of venture capital investments. European pension funds have been unshackled from constraints placed on them from investing in venture capital funds so that they now represent the largest source of funds for venture capital. 8

Venture Capital in LAC

In comparison to Europe and the US, the venture capital industry in LAC is in its earliest stages, although its bank-centered capital markets have provided over the years limited amount of investments that could be considered as venture capital in European terms. By 1996 venture capital firms, broadly defined, invested US$ 1.49 billion in LAC. From there the industry exploded to US$ 3.42 billion in 1997 and grew further to US$ 5.0 billion in 1998. Unfortunately that pace of growth was likely to decelerate and it did in 1999, actually dropping US$ 1.31 billion falling to US$ 3.69 billion. As the region started to show signs of distress in late 1999 the total dropped in 2000 to US$ 2.77 billion. With the serious retreat of the regions economies and the political uncertainties during 2001 and 2002, venture capital financin
slid to below 1996 levels, first to barely over US$ 1.0 billion in 2001 and finally reached a low of US$ 709 million in 2002.

The numbers may represent a worse picture than the reality. A good portion of the investing during 1997-2000 was the result of large privatizations, distorting the numbers. The worrisome aspect of recent developments is the lack of interest in the region on the part of foreign investors. It should also be noted that a substantial part of the resources, in fact almost all, was sourced from outside the region. A favorable development in 2002 is that the deal flow during the period is more representative of the types of venture capital operations associated with high risk / high reward investments leading to the establishment of new business operations. 9 The investments represent small business opportunities which may ultimately lead to highly profitable businesses and sustained economic development.

The Legal and Regulatory Framework

Despite the immense success that venture capital has had in the US, it was not the lone factor responsible for the innovation and industry so often viewed in awe by other countries wishing to replicate the model. There is a direct and empirical link between what happened in the Silicon Valley and the availability of financing through venture capital operations. The question that must be asked by all interested in development is whether the American venture capital prototype has application to other countries, cultures, societies and legal systems so that is may be transplanted in whole or with modification to other environments. Will the model, without adjustments, wither in other settings? If modifications are needed what ultimate form is best suited to achieve the desired results?

Before discussing potential modifications to the US venture capital model, it is fundamental that its characteristics be understood. As in so much of the US economy, venture capital is a product of an empowering society, operating in a legal and regulatory environment where what is not prohibited is permitted. Venture capital’s most significant attribute is that it evolved – it was not a product of planning. Whatever governmental support America’s venture capitalindustry received, was the result of operating in a favorable business environment. It was not forced fed. It was the product of unanticipated consequences. In its most distilled form venture capital is nothing more complicated than the result of contract negotiations between a financier, and an early stage and dependent entrepreneur: private ordering. 10 The industry’sunderpinning assumption is that a young, relatively inexperienced, small operation with a good idea can enter into a contract with a benevolent devil (venture capitalist) with massive experience and business acumen and that that engagement will produce an efficient growing business in some cases. It is Faustian to its core. And it has worked in the Silicon Valley for the simple reason that there is a mutuality of interest in the ultimate outcome: a successful business venture. There is a twist: an early exit of the financier has been part of the bargain.

Venture Capital’s Cast of Characters

There are five distinct roles played out in a typical venture capital operation: the capital provider; the venture capital fund;the management or operator of the fund, which in the jargon of the industry is the venture capitalist; the enterprise; and the exit. Each of these roles has its own minor subsets and nuances.

The Capital Provider

The venture capital fund or investor has to raise the resources from which investment will be made. The typical “investor” may be a wealthy individual, 11 pension funds, insurance companies, corporate enterprises, endowments, banks, foundations or specialized financial development organizations. 12 As investors they become limited partners in the fund which will make the investments. The investors and the operator enter into a contract, the Fund Document, delineating the obligations of the operator/general partner and the respective rights of the limited partners. The Fund Document will also indicate the target investment areas – either by sector or region or other parameters, limits on investment size per investment, the distribution of assets, governance issues – such as draw down procedures for calls on capital. The Fund Document will also set management fees for the General Partner, which is generally also the management company. Most importantly it will allocate the distribution of sale and other proceeds received from investments. As a general rule the limited partner receives almost all of the proceeds until the capital contributed, plus some hurdle rate of return 13, has been achieved. After the hurdle rate has been achieved the limited partners and the general partner share the remainder in a ratio negotiated between them, which is typically 80:20.

The Venture Capital Fund

Venture capital funds in the US have limited life, generally no longer than ten years. The rapid nature of high tech companies makes that ten year horizon an adequate time frame within which a fund can perform its functions adequately. Typically, the Fund is given five years in which to invest the pool and another five years for divestments. 14 The preferred structure of the venture capital fund is a blind pool; i.e. the capital is provided without any previous identification of the specific enterprise which will be the recipient. A blind pool allows the manager to perform the real role of screening the array of opportunities to identify that unique case which will permit the optimal use of its scarce resources. The standard used to screen those opportunities is that business providing the highest return prospects to investors. The fund is a conduit by which the general partner/manager calls on the limited partners to provide the monies needed to invest. Significant penalties on the limited partners are embedded in the Fund Document for failure to disburse on demand. The fund retains minimal cash, passing on to the investee company immediately any sums received from fund investors pursuant to disbursement requests, and similarly passing back to the fund investors any sums received as dividend or other distributions from the investee company, including sale of the investment itself.

Manager or operator of the fund (the venture capitalist)

The pivotal character in the industry is the manager of the fund. Consistent with the Fund Document, he raises the money for the Fund, negotiates the Fund Document with the limited partners, identifies investment opportunities, selects the investment, negotiates the terms under which the Fund invests, provides advice to the investee, controls its management decisions, molds it during a relatively short period, and then arranges an exit. None of these activities is dictated by any specialized laws or regulations which apply exclusively to venture capital. Consistent with its evolved nature, the industry operates in the ambiance of the business environment in which it finds itself. As a general rule the manager is a partnership itself of investment professionals with specialized knowledgeand expertise in the field in which it operates. The professionals meld together an assortment of talents individually and as a group which permits it to provide the value added which converts the investee into a successful operation and an attractive target for an eventual sale.

The venture capitalist is described in some quarters as a coach. 15 Clearly the value added to the allocation of resources is created by the venture capitalist. But a more critical contribution that the venture capitalist is expected to make is that of “coaching,” possibly controlling the early stage development of a portfolio company. The venture capitalist approval may be required for all significant governance issues. In all likelihood management positions will be filled with the advice and consent of the venture capitalist. The operating theory governing the relation between the investee and the venture capitalist is that the expertise, not just the amount invested, will transform an infant business to an attractive acquisition through an initial public offering (IPO) or merger. For this to work the venture capitalists most valuable asset is its know-how and reputation. The know-how must not merely be financial but must at least match the technical knowledge of the company’s management and founders.

The Investee

The focal point of all the effort is the business venture itself. It includes as an organic whole the innovator, the entrepreneur, and the other individuals who have developed a product or identified an opportunity, and wish to transform it into a successful venture. For the economy, all the value added in terms of production and jobs are centered in the investee. It metamorphosizes into another Cisco or Intel, and becomes the ultimate provider of goods and services, jobs and tangential business activity. The economic success of venture capital as an industry is measured by and commensurate with the success of the investee.

The Exit

For purposes of understanding America’s venture capital industry, it is necessary to personify a process: the Exit. The ultimate sale by the Fund of its investment is a critical element in the sustainability of the industry. The exit recycles the resources within the economy, provides additional resources for another round of investment, measures the success of the business’s operations, attracts through that success more investments into the industry, and differentiates and calibrates managers. The differentiation and calibration process makes it possible for the investors to distinguish among managers and to channel more resources through the most successful managers. A proven track record also augments the reputation of the manager increasing his/her credibility as a manager, facilitating his/her ability to add value in the next business operation. 16

In America the securities markets play an important and critical role in the exit. Many venture capital operations are ultimately sold through an initial IPO. Those that are not sold in an IPO are likely to be acquired themselves by firms that are publicly traded. Thatacquisition may involve a swap of shares of the venture capital business for those of a public company. Or there may be an intervening merger between venture capital operations with the expectations of an eventual IPO of the merged entity. The point is that in one way or the other a vibrant securities market plays a defining role in the industry. Without a functioning securities market, investments get stacked up curtailing the recycling of resources, impeding further money raising, and constraining growth and development of the industry.

Strategic development policy necessary to support Venture Capital

The venture capital model is simple. It has few components. It can be fashioned to conform to the peculiarities of the business venture requiring finance. However, the model may be deceptively simple in theory but much more complex to implement as so much of its success is a function of the legal and regulatory setting, the entrepreneurial environment, the depth and breath of the securities market, the availability of institutional investors and, finally, the existence of a cadre of venture capitalists with the skills and management talent to implement a successful structure. As Europe has discovered, although it has implemented a program to promote a venture capital industry and has experienced a dramatic growth of its venture capital investments, the gap between its industry and the U.S.’s has widened. “The size of the US industry is not only much bigger but their investments have been growing at a faster rate. If this trend continuous (sic), the ambitious objectives …, which go well beyond those in the RCAP (to foster economic growth and job creation), would become unattainable.” 17

In the case of LAC, can the venture capital model contribute to growth and job creation? If it can, does venture capital have a role in supporting Small and Medium Enterprises (SMEs)? What reforms or structural changes are needed within LAC to make venture capital a vibrant part of the financing of high tech and SMEs?

Reforms Needed – The Capital Providers

LAC has a savings deficit and a dearth of financial intermediaries which could provide the resources needed to fund adequately a venture capital industry. As in the case of Europe its capital markets are bank-centered. The dominant role banks play in the capital markets of LAC require, at least initially, if the industry is expected to launch within the foreseeable future, that the banks play a major role in providing the resources needed to kick start the industry. However, because of the nature of venture capital operations (high risk/high rewards), it may be improvident for any significant percentage of a bank’s capital to be subject to the risks inherent in venture capital investing. Each country will have to determine for itself the level of venture capital exposure which can be prudently exposed to these risks. Europe’s commission recommended the adoption of prudential rules allowing institutional investors to invest in venture capital. 18 LAC will have to consider similar rules. Such rules will have to cover the array of institutional investors present in the country. Issues involving double taxation and capital gains taxes may have to be addressed to assure that no impediments or resistance to the formation of venture capital operations exist.

America’s pension funds are a major investor in venture capital funds. Europe, with some success, is promoting the increased participation of pension funds in the industry. Obviously the trend and desire of governments to promote the development of a pension industry in LAC is an encouraging development. As pensions become better endowed efforts should be made to allow a prudent level of investment by these institutions in venture capital.

Reforms needed -The venture capital fund

The complexity of incorporating in LAC is legendary. Venture capital funds are financial institutions, which should be of limited interest to government regulators – other than to assure that their existence is facilitated. If they are made to obtain all the approvals that are required of financial intermediaries, the industry will be seriously handicapped. Special legislation and regulation permitting the existence of blind pools may be required in some jurisdictions.

Reform needed – The Venture Capitalist and the Investee

The relation between the venture capitalist and a portfolio company is controlled by agreements between the parties. Most of the LACs have few impediments to what may be agreed among consenting parties. Whatever constraints do exist, the needs of the venture capital industry will be unlikely of sufficient countervailing importance to offset whatever political pressure were that gave rise to those constraints. The real effort in terms of reforms which will meaningfully impact the venture capital process should be for governments to promote legal and judicial reforms to assure speed, honesty and transparency in the enforcement of contracts. Too frequently the sanctity of contracts is undermined by courts and by governmental fiat. Even when no venture capital operation is involved every such instance further erodes the confidence of investors and with it the ability to coax an industry into existence.

Reforms Needed – the Exit

Unfortunately for LAC its financial markets are bank-centered while the American venture capital industry is stock market-centered. For venture capital industry to work at its optimal an easy exit which maximizes valuation is fundamental. Without a functioning securities market, exits become more problematic, delaying the recycling of funds and all the other benefits derived from monetizing the value created by the venture capitalist.

LAC’s stock markets lack breadth and depth. Very few listed or traded stocks have sufficient trade volume to provide investors liquidity. What is even more of concern is that the little capital markets development that has occurred seems to have concentrated wealth, constrained growth, and complicated the allocation of capital to SMEs. By their nature, bank-centered economies are much less fluid, much more reliant on loans than equity. There may well be a relation between the character and structure of a country’s capital markets and its ability to support growth and distribute wealth equitably. As noted above, Latin America’s distribution of wealth ratios are worse than any other region of the world, excepting Africa. The region’s largest country has the worse distribution ratio of any country of the world of significant size.

Nonetheless, Europe has proven that a venture capital industry can be coaxed out of a bank-centered economy. LAC would do well to promote the creation of a venture capital industry. In time with other reforms directed specifically at fostering a securities market, a stock market-centered economy can slowly evolve. Meanwhile, a more contained version of America’s venture capital industry can minister to the needs of SMEs.

Venture Capital for SMEs andthe Equitable Distribution of Wealth

If one were asked what the two scarcest commodities in LAC were, funding for capital investment and know-how would rank high in almost any fair assessment of the region. In such an environment, a venture capital industry should flourish for the simple reason that it marshals both money and know-how to the country’s benefit optimally. The forte of the venture capital industry is its ability to mobilize resources for allocation to industries with the highest potential rewards, albeit with commensurate risks. A further strength is the industry’s capacity to bring to bear on a new business venture the concerted effort of exceptional talent with unique know-how. Because venture capital focuses on new businesses, SMEs will be overly represented. The effect will be to open access to businesses that are less likely to be attractive to banks. Furthermore, the marrying of SMEs with the professional financial and technical know-how of a fund manager will accelerate the growth of the business. After all the real value of the industry is not just the mobilization and marshaling of resources – which venture capital does very well — but also the transformation of a group of small businesses into a heroic successes, providing new jobs and stimulating spin-offs and correlated operations.

Promoting the development of a vibrant venture capital industry can do more to stimulate and maintain a healthy growth rate and assure greater participation in the wealth created than any other capital market improvement. LAC would be well advised to follow the example of the European Union and adopt a risk capital action plan for each country and the region as a whole. Undoubtedly, a RCAP for LAC would require the region to take a real measure as to why its capital markets have not sustained growth for prolonged periods, and why even the short spurts have been accompanied by wild and debilitating downturns. An RCAP can promote a financial infrastructure which will be friendlier to, and better suited for, SMEs. A better functioning capital market can sustain greater growth rates and has a chance of distributing wealth more broadly.

1 This will include any security which is convertible into equity or receives, within the context of the country involved, equity type returns.
2 See Thomas Hellman, Venture Capitalists: The Coaches of Silicon Valley, email [email protected].
3 See generally, Jack S. Levin, Structuring Venture Capital, Private Equity, and Entrepreneurial Transactions, Kirkland & Ellis (2002).
4 With respect to any statistics used herein relative to “venture capital” the definition of the term adheres to the definition of the country or region to which it refers. This creates a problem making comparisons between countries and regions as term has a restrictive meaning in the US and a comprehensive one in Europe and other regions.
5 Hellmann, supra note 2 at p.2.
6 Bernard S. Black & Ronald J. Gilson, Venture capital and the Structure of Capital Markets: Banks versus stock markets (1998).
7 Communication From the Commission to the Council and the European Parliament, On Implementation of the Risk Capital Action Plan (RCAP), p.4.
8 Ibid. Note should be made that US pension funds accounted for a significant amount of the investment increase as they searched for opportunities in Europe, particularly in England.
9 Most of the information concerning LAC relative to venture capital is obtained from, World Trade Executive, Venture Equity Latin America: 2002 Year End Report.
10 Ronald J. Gilson, Engineering a Venture Capital Market: Lessons from the American Experience, Stanford Law School, Working Paper 248, November 2002.
11 The US securities laws provide parameters qualifying individuals and transactions which may provide funds in venture capital operations.
12 Specialized financial development institutions outside the context of the United States would include the International Finance Corporation (IFC), the Inter-American Investment Corporation (IIC), the Commonwealth Development Corporation (CDC), Corporacion Andino de Fomento (CAF), the Central American Bank of Economic Integration (CABEI), and country specific development banks such as Banobras of Mexico.
13 A minimum rate of return that must be earned before a sharing by the manager occurs.
14 Divestments can and often do occur within the investment period. Generally such divestments will permit the venture capitalist to recapture the capital portion of any sales proceeds. Early divestments have an enormous value as they favorably impact the fund’s ultimate internal rate of return (IRR).
15 Thomas Hellman, Venture Capitalists: The Coaches of Silicon Valley, [email protected], February 2000.
16 The incentives from a track record of success are such that there is a danger that venture capitalists will be tempted to rush companies to IPO before they have been sufficiently seasoned. See, Paul A. Gompers, Grandstanding in the Venture Capital Industry, J. of Financial Economics 42 (1996) 133-156.
17 Communication from the Commission to the Council and the European Parliament, On Implementation of the Risk Capital Action Plan (RCAP), p. 20 Oct. 25, 2001.
18 Id. p. 26.