VENTURE CAPITAL AND PRIVATE EQUITY ASSIGNMENT, MODULE: MOD001135,SID: 1230580

Assignment ofVenture Capital and

Private EquityModule: MOD001135

Year 2013

SID Number: 1230580Student Name: Muhammad Atif

Module leader:Hassaan Khan

Word Count

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4,022

Table of content:

1.Introduction...................................................................................................................................4

2. History of Venture Capital and Private Equity……………….…………….………………….……..4

3. Growth of venture Capital……………….………………………..…………………….………...….5

4. Informal Venture Capitalists…………………………………………………………..….…...….7

4.1. Angel Financing……………………..…………………………………………..………………7

4.2. Who are angel investors? …………………….………………………………………………..8

5. Origin of Silicon Valley........…………………………………………………………………………8

5.1. History of Silicon Valley……..…………………………………………………………………9

5.2. Venture Capital Investments in SiliconValley…………………………………………………9

6. Exit Routes of Venture Capital and Private Equity…………………………..…………………..….10

6.1. Trade sale or (Acquisition) ……………………………………………………………………...10 6.2. An initial public offering (IPO)…………………………………………………………………10

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6.3. Secondary Sales …………………………………………………………………………………11

6.4. Buy-Back …………………..………………………………………………………….…………11

7. Financial Crisis and Venture Capital………………………………………………………………….11

7.1. The effects of Financial Crisis on VentureCapital………………………………….…………11

7.2. CAUSES………………………………………………………………….………………………11

7.2.1. United States housing bubble …………………………………………………….……11

7.2.2. Subprime crisis …………………………..…………………………………..…………11

7.2.3. Deregulation and complex financialinnovations………………………………………11

7.3. EFFECTS…………………………………………………………….…………..………………12

7.3.1. Shortage of supply of money to venture capitalfunds………….…….……...............12 7.3.2. Decrease in the valuation of VC-backed start-ups……………….……………..……12

8. Conclusion………………………………………….…………………………………………………..12

8.1. IMPLICATIONS……………………………….………………………………………………..12

8.1.1. Implications for new start-ups……………………………….…………………………..12

8.1.2. Implications for the evolution of innovativeindustries and technological development…13

9. References and Bibliography……………………………………………………………………….14

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1. Introduction

The brief introduction about Venture Capital and Private Equity arethat they both recruit former investors or bankers, invest in companiesand instead of taking advisory fees, they both make money frominvestments. Precisely, a division of private equity is venture capital(Mergers & Inquisitions).

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Late 19th and early 20th was the period when venture capital and privateequity was developed in the United States by its ancestors. In thatperiod rich families were looking at high-return ventures in which theycould invest. The market for risk assets during the late 19th and early20th century stayed mostly patchy or unorganized. The first momentum toorganize investing came from well-off Americans, these includedWhitney, Rockefeller, and Bessemer families who appointed expertsupervisors on the way to deal in assuring immature corporations in1930s and 1940s (A. Gompers, 1994).

The purpose of the study is to critically analyze that what VentureCapital and Private Equity is and how they developed, its growth, therole of angel financing and the exit route of venture capital andprivate equity. At the end, the impact of financial crisis on venturecapital.

2. History of Venture Capital and Private Equity

MIT President Karl Compton and General Georges F. Doriot who was thelecturer at Harvard Business School, they both found American Researchand Development (ARD) in 1946 which was the first exact venture capitaland private equity firm (Gompers, 1994). In rising corporations thehigh-risk investments are made by this small group that was based ontechnology extended for World War II (Wright and Robbie, 1998).

‘Doriot was the heart and soul of ARD and is justifiably calledthe Father of Venture Capital. Doriot’s focus was on adding valueto companies, not just supplying money. Companies funded by ARDwere considered to be members of the family’ [Sexton and Kasarda,1991].

Gompers and Lerner (2001) cited Liles (1977) in their work that theachievement of the reserves collected widely in 1957 from its $70,000investment in Digital Equipment Corporation, which later increased by$355 million in value, which considered the partially of ARD’s earningsthroughout the 26 years of its continuation as a self-determining body.ARD was organized as a widely traded as a close ended fund, A closeended fund can be defined as, A deal of shares of joint fund from oneinvestor to another to trade like an individual stock. This type offinance increased the assets by vending the shares to depositors. These

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investors were able to trade with other investors on an open barter, ifthey no longer wish to hold the investment. This condition permittedsubsidizes to put in illiquid assets, make safe in the understandingthat they would not need to return investors' funds in an indecisivetime edge. Security and Exchange Commission regulations did not preventany class of investors from holding the shares because it was a fluidinvestment that could be freely sold and bought at any time. Refer thehazards linked to the unverified fresh way of investing, so the littleinterest showed by the institutional investors in that shares.Consequently, lots of shares promoted to individual in ARD (Gompers andLerner, 2001).

After ARD’s formation, the few other venture organization commenced inthe decade which was as well prepared to close ended subsidizes.However, there was shortly discovered a momentous problems in publiclyoperated structure (Gompers, 1994).

During 1958, the right was given by Federal government to the smallbusiness Administration that they can lease small business investmentcompanies (SBICs) who determined to show vigorous role in encouragingundersized company’s expansion by investing in small firm and take apart in it. The number of SBICs increased hurriedly and their aim wasto give premature phase of financing in different industries.Approximately 700 SBICs have power in the United States to invest thebulk of risk assets by the mid-1960s (Gompers, 1994).

SBICs have a tendency to provide little more than money that is why itdiffered noticeably from American Research and Development (ARD). SBICsdid not supervise the firms as on the go investors because the majorityof supervisors having a little diligence proficiency due to this theywere not able to supply industrialist’s better information that couldhelp to access diligence professionals, other than to rely on top ofthe reimbursement of loans to estimate an accomplishment of theventure. Numerous small business investment companies were capable totake a number of companies’ unrestricted for the booming period becausethe IPO market was tremendously dynamic during the late 1960s. But theinvestment in risky projects due to advance warranties caused by the“bubble” of IPO and unfavorable investment inducements. Many SBICs

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backed firms began losing money and the movement of IPO dropped by one-tenth from its previous level. The reason was the downturn later thanthe stoppage of first oil in 1973 to 1974 which smacked immaturecompanies predominantly hard. SBIC backed companies could not meetinterest obligations because they were often financed with debt.Therefore, many were forced to liquidate because they could not gathertheir concern and main refund agenda due to highly leveraged in nature(Gompers, 1994).

The far-reaching conventions rapidly dispirited the majority of well-known business enterprise entrepreneurs to contributing into the planbecause SBICs plan was inadequately intended. In the meantime, thecontenders having a inadequate investigation led to the entry ofcorrupt hands that endowed with the deprived projections in firms orcould be in complete falsified projects, usually grasped by closeconnections like family or friends. Due to this many of the SBICsdistorted in the late 1960s and 1970s. Only those companies (like ARD)continue to exist in several downturns that relied on equally to bothequity financing entrepreneurial firm and the venture capital firm(Gompers and Lerner, 2001).

3. Growth of venture Capital

In 1970s, Individuals started new private venture capital and privateequity firms after the dramatic success of American Research andDevelopment (ARD). Bill Congelton, the ex- associates of ARD playerswas actually some of the earliest impersonators who initiated the DEC.Many services were provided by the “new” venture capitalist to theindustrialist as well as right of entry to corporate lawyers, industryexperts, investment bankers and accountants.

At National Semiconductor the director of marketing (Don Valentine),was the one who followed Doriot’s tradition in early phase. He knewthat Stephen Wozniak and Steven Jobs required an experienced executiveto start their immature project, “Apple Computer”, when Stephen Wozniakand Steven Jobs required his help in 1976. Kotkin (1984) writes, A.C.Markkula who was the former Intel manager persuaded by Valentine, to beApple’s head. Valentine fetched in $600,000 more, in start-up fundingand in addition to contribute $91,000 of assets by organizing the

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investment with other venture capitalists. In venture capital moneyApple received $3.5 million, prior to its initial public offering. InDecember 1980, When Apple went to public that investment was $271million in value (Gompers, 1994).

Venture Capital was a lodge industry before 1980s. The venturecapital funds was never much more than $200 million before 1980s butduring 1980s, it grew considerably and was committed to new venturecapital funds at $4.9 billion in 1987 (Gompers, 1994).

The movements in venture capital obligations show that they areextremely associated with the initial public offering market. As youcan see the IPOs number in totality for each year in the period of 1969to 1992 plotted in the below mentioned figure.

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Source: The Rise and Fall of Venture Capital

According to Revenue Act in 1978, the capital gain tax reduced from49.5% to 28 % and the other change was in policy of Employee RetirementIncome Security Act (ERISA) “prudent man” law in 1979, which consideredas two important legislative changes in venture capital whichexplicitly allowed pension funds to invest in high risk assets,including venture capital. In early 1980s, fund raising by independentventure partnerships recovered because of these eased restrictions anda full-bodied market for public offering. As a result of thiscorporations were also attracted once again to the promise of ventureinvesting in reaction. That is why 1986 was considered as a peak periodwhen corporate funds supervised $2 billion, or nearly 12 percent of thetotal pool of venture capital. In 1990s, both in the United States andabroad, the interest in corporate venture capital raised again by therecent success: that is, the rapid growth of funds and their attractivereturns in venture capital and private equity sector (Gompers, 1994).

4. Informal Venture Capitalists

Individuals who seek to invest a part of their own assets in venturesare called ‘business angels' or Informal venture capitalists. Supportby Landstrom (1993) illustrates that there are noticeable global

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Source: The Rise and Fall of Venture Capital

dissimilarities among to involvements of unofficial investors in theirinvestee companies (Wright and Robbie, 1998).

4.1. Angel Financing

The capitalist suggestion to profits making firm which is the mostsignificant considerations a new entity faces is the procurement ofassets. Private equity gives less than half of the total equityfinancing for new firms which is estimated by many studies but thefewer analyzed, so far similarly significant foundation of start-upcapital is the unofficial venture capital market known as angelfinancing (Wong, 2001; 2002).

‘In 1976, Anita Roddick, a self-confessed hippie who found ordinarycomponents to put up for sale as cosmetics in low-priced bottles madeby plastic, desired capital to release a next shop. Her bank hadrefused her request for a loan on the basis of that her plan was notfeasible. Ian McGlinn offered her £3000 to set up the shop. In 2006,when Roddick sold her company, ‘The Body Shop’, McGlinn’s stake wasworth roughly £137 million’ (London Times, 2006).

In general term, a person who offers capital for to start a newproduction or existing business is known as angel investor. Typically,the funds can be provided by the institutional venture capital, privateequity firms, friends or family to fill up the financing gap.Sometimes, usually it’s hard for family or friends to give more than afew thousand. So, in that case angel investor offers capital for tostart-up new business.

Due to the informal nature of the angel market, it is difficult tomeasure the size of it. According to Freear et al. in 1992, the numberof angels fund is ten times greater as compare to venture capitalist.In 2002, the range of the market of angel investors evaluated as 100billion $ by National Venture Capital Association in United States,whereas, institutional market was anticipated at almost half of that at$48.3 billion. GEM (Global Entrepreneurship Monitor) evaluated thedimension of the angel market in 2002 at five times bigger than theinstitutional market of venture capital. Further in recent times, somediverse investigations were performed during 2001 to 2003 by shane(2008), in which he found approximately 140,000 to 266,000 angels

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committed among $12.7 billion to $36 billion near between 50 to 57thousand firms yearly (Wong, Bhatia and Freeman, 2009).

4.2. Who are angel investors?

Although numerous definitions are available of angel investors but thisis the most common one in which, a person who normally invest in anundersized classified firms having a high-net worth on their ownaccount. Officially, according to the SEC (United States Securities andExchange Commission), angel investors are ‘accredited investors’. Acredited investor is an entity who has a net value of more than $1million or estimated individual (household) yearly earnings of morethan $200,000 by SEC Rule 501 of Regulation D. Conversely, attributedinvestors account for only 23% of the total angel residents, so, itmeans most of the angels may not be qualified according to a 2008investigation by Shane. Whereas, over 6 million households estimated asqualify to be accredited investors according to the Federal Reserve’sSurvey of Consumer Finances. While a lot of surveys approximate thenumber of dynamic angel investor in US just about 250,000 to 400,000.The decisive factor which differentiates angel investors frominstitutional venture capitalists is that they invest their own moneyin firms; on the other hand, institutional venture capitalists receivedmoney from others to invest in private firms (Wong, Bhatia and Freeman,2009).

‘In 1998, Andy Bechtolsheim, one of the co-founders of SunMicrosystems, wrote a check for $100,000 to students’ names wereSergey Brin and Larry Page. Their software was Google. The checkwas made out to a firm that didn’t even exist, ‘Google Inc.’before they could deposit the check, Brin and Page needed toincorporate and open a checking account’(Wong, Bhatia andFreeman, 2009).

5. Origin of Silicon Valley

The legend produced companies that originally started off with smallcapital which had a huge impact on the world. Gordon Moore and RobertNoyce were assisted by a person called Arthur Rock to fundraise money,in order to create the company Intel Corp with $10 million. Thiscompany is known as the primary large semiconductor and was currentlythe industry innovator in 2010. Twenty-two year old (Steve Jobs), his

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colleague (Steve Wozniak), and a technology executive (Mike Markkula),primarily funded the electronics company Apple Corp. Genentech a firmthat synthesized human insulin for diabetics initially commenced with$250 thousand and produced a profit of 3500%. The two search engines,which are Yahoo and Google, were made by two Stanford grad students(Rao, 2011).

5.1. History of Silicon Valley

In 1914, Tabulating Machine Company, Computing Scale Company andInternational Time Recording Company , these three weak companies werefinanced and merged by group of wealthy individuals into a singleentity, hired Thomas Watson from the National Cash Register Company asPresident, and turned into the International Business Machines Company.However, After Second World War, the contemporary venture capital worldis normally considered to have begun. It has had a dramatic impact onNorthern California in technology revolution that has been taking placein this country for the past 30 years.

The three major events considered as main reasons to push atechnological leadership in that country over a 15 years period. First,there was a group of refugees in which some of the world’s most well-known scientists (Einstein being an obvious example) and engineers, whocame to this country in the mid-1930s because of Hitler’s persecutionof Jews. They came together with native scientist and engineers tobuild a technical talent in United States. The Second was the hugeinvestment in research and development throughout the Second World War.The Radio Research Lab at Harvard and the Radiation Lab at MIT prepareda vast number of scientists who significantly contributed to theexpansion of digital technology. The third was recently qualifiedAmerican engineers, who freshly gained experiences in the field of R&Dlabs, went back to trained other students in universities to making awhole new generation of engineers, who later1950s and 1960s formed therevolutions of microelectronics (Hambrecht, 1984).

“Stanford is perhaps the most important. As the venturecapitalist Bill Draper once said:  “Silicon Valley is so luckybecause it’s starting from Stanford. I don’t think there’d be aSilicon Valley without Stanford.”  Stanford started out with oneof the best radio engineering departments in the country in the1930s” (Rao, 2011).

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5.2. Venture Capital Investments in Silicon Valley

In 1960s, venture capital industry helped a lot to the quick expansionin Silicon Valley of high-tech industries. By providing funds in eachstage of innovation in Silicon Valley: e.g. semiconductor industrydevelopment in 1960s, after that financing in biotech industry andcomputer industry in 1970s, the bang of the networking industries andworkstation in the 1980s. According to one study that in Silicon Valleyduring 1980s, more than 85 new semiconductor firms were started and hasproduced almost 25,000 jobs and more than $2 billion in annual sale asyou can see in figure below. Last but not least, in 1990s thecommercialization of the Internet as well (Hellmann, 2000).

During the growth of Silicon Valley, the venture capitalist providesassets but also supervision and counseling are provided by venturecapitalists to entrepreneurs (Hellmann, 2000). In Silicon Valley,nearly each flourishing company received support from venturecapitalist during the past three decades (Saxenian, 1990; Banatao &Fong, 2000).

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In 1980s, venture capital played an active character in constructingseveral foremost technology industries. For example the majorinvestments in firms by venture capital were include: Some of the mostnotable venture capital investments were made in firms that include:LSI Corporation , Electronic Arts, Federal Express, Compaq,  AppleInc., Genentech and Tandem Computers .

6. Exit Routes of Venture Capital and Private Equity

Black and Gilson (1998) and, Cumming and MacIntosh (2003a; b) have bothshown that these are the exit routes of Venture Capital:

6.1. Trade sale or (Acquisition): Trade sale is entire and instantexit as compared to IPO and it is better for those entrepreneurswhose desire to make companies at early stage but has no excitementfor growing the business (Lau, 2010; Koola, 2011).6.2. An initial public offering (IPO): Selling of shares to thepublic is called IPO. Usually small companies go for IPO becausethey are looking to further expansion and in this stage they need acapital for growth. Capital benefit include: capital expenditure,R&D and even can be used to pay off debts (Balasubramaniam, 2009).6.3. Secondary Sales: In this venture capitalist sell shares toanother venture capital fund or a strategic acquirer. It isdifferent from acquisition because in this they only sell shares tothird party. Whereas, investors and entrepreneurs keep theirinvestments (Cumming and MacIntosh, 2000a).6.4. Buy-Back: To increase the earning per share (EPS) of thecompany’s shares, usually companies buy back their shares. As aresult of number of outstanding shares will reduce that lead toboost in EPS of the company. Second reason is that when company hasno new projects to invest in and has excess cash reserves thencompany goes for buy back their shares. It is mainly done with thehigher price as compared to current market stock price in the stockmarket. Moreover, in some cases when promoter wants to increase thestake in the company in order to shrink the intensity in promoter’sholding because takeover chances of the company has increased, inthat case buy back of shares is the ideal way (Parikh, 2010).

7. Financial Crisis and Venture Capital

The year 2008 is considered as a financial crisis era. September 2008,was the period when financial crisis happened and also it has shown bythe bankruptcy of Lehman Brothers and the economic failure of AIG

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(American International Group). Many other big companies in the worldand United States suffered during this crisis and lost their largeportion of value. Because of government intervention, few financialinstitutions could only be saved from bankruptcy (Block and Sandner,2009, pp. 295-309).

7.1. The effects of Financial Crisis on Venture Capital

In general, there was a ruthless impact of the crisis on the venturecapitalist due to its powerful connection between financial markets andventure market. Pivotal role played by a venture capital industry inthe beginning of the company’s life, from its development tocommercialize its product and innovations. That is why venture capitalconsiders as an important factor for innovative industries (Gompers andLerner, 2001; Jell et al., 2009; Zider, 1998).

Some of the causes and effects are given below:

7.2. CAUSES

7.2.1. United States housing bubble: One of the reasons wasincrement in prices of US housing due to that increase in financialinducements for banks to hold the mortgage loans and decline in therate of federal funds in 2002. Consequently prices of housing peakedin 2006 and as compared to previous decade their values had doubledovertime. This period was cause to increase in the subprime mortgageor high risk with comparatively low credit ratings (Block andSander, 2009; Varies and Block, 2010).

7.2.2. Subprime crisis: The federal fund increased slightly in 2004with one percent level which increased payments for borrowers toholding adjustable mortgage rate. Increasing federal funds ratewith the growing allocation of subprime mortgages led to increase inhomeowner’s avoidance on mortgage payments. The first hedge fundscollapsed (e.g., Bear Steams) in august 2007 with holding a largeshares of mortgage derivatives (Block and Sander, 2009; Varies andBlock, 2010).

7.2.3. Deregulation and complex financial innovations: Providinggenerously proportioned shares of subprime mortgages have not beenstopped by government regulation and due to driving economic forcefell under dissimilar regulation, allowing for larger debt ratios.As a result of this, subprime mortgages were pooled into new

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financial products and put up for sale to investors as mortgage-backed securities (MBS) and collateralized debt obligation (CDOs)(Block and Sander, 2009; Varies and Block, 2010).

7.3. EFFECTS

7.3.1. Shortage of supply of money to venture capital funds:Investors in venture capital funds were usually insurance companies,large banks and pension funds (Gompers and Lerner, 1988). Due to thecrisis, venture capital firms had difficulties to find investors. Asa result, many of them became bankrupt (e.g., Washington Mutual,Lehman Brothers), and few of them were saved because of taking helpfrom government (e.g., Freddie Mac, ABN AMRO, Commerzbank, AIG,Fannie Mae), or merged with others to survive (e.g., Merrill Lynch).Because of crisis venture capital firms faced rigorous exitchallenges which were also the reason of reducing the supply ofmoney for venture capital funds (Block and Sander, 2009; Varies andBlock, 2010).

7.3.2. Decrease in the valuation of VC-backed start-ups: In thefourth quarter US GDP declined by 5.4% which led them into inmostrecessions. Firms and consumer have less money to spend duringrecession due to this venture capital-backed start-ups facedproblems to generate enough revenues. Due to this pressure, venturecapital firms applied higher discount rates because the start-upsbankruptcy risk has been increased (Block and Sander, 2009; Variesand Block, 2010).

8. Conclusion

In time of value the term venture capital & private equity is higher inUnited States as compare to other countries. The tight scrutinizing andthe organize methods of high risk-high reward ventures and theinformative activities plays a pivotal role of making venture capitalas valuable field.

Funding of venture capital is very significant for young business ininnovative and technology firms because it can help to spin innovativethoughts into products. It is also relevant when firms perform R&D

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because in R&D, they have to effort on many stages from development todistribution, or expand their product line (Gompers and Larner, 2001;Zider, 1998).

However, the 2007–2008 financial crises found venture capital investorsvery susceptible. During the crisis, the venture capital activityslowed down and the crisis affected many financial institutions. Laterin September 2008, it became clearly visible that venture capitalmarket was already declining. Therefore, venture capital seeking start-ups decreased in value which led them to sharp decline in stock priceson public equity market.

8.1. IMPLICATIONS

8.1.1. Implications for new start-ups: For new business or start-ups should take lesson from previous financial crisis and thosestart-ups who seeking later-stage financing, try to predict theirdevelopments and makes strategies in advance and adapt theirbusiness planning for that reason. In future they will bump intodifficulties in raising funds for their product development process.So those who seek initial funding should keep in mind and thinkabout alternative sources, such as bank loans or angel investors.

8.1.2. Implications for the evolution of innovative industries andtechnological development: As we know that venture capital plays asignificant role to fund a new businesses in innovative andtechnology sector. So government should be aware of the negativeimpact of financial crisis and have considerable influence on theirnational venture capital market up to certain level. Moreover,government should locate public funds for start-up firms.

However, there would be a drawback when the government plays arole of actor in venture capital market (Block, Vries and Sander,2009).

To summarize, venture capital have been, are and will continue tofinance present and future world leading firms.

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9. References and Bibliography:

Balasubramaniam, K., 2009. What are the advantages and disadvantages for a company going public?[online] Available at: http://www.investopedia.com/ask/answers/06/ipoadvantagedisadvantage.asp[Accessed 16 April 2013]

Berglund, H., 2011. “Early stage venture capital investing: comparing California and Scandinavia.” Taylor & Francis Group. 13, pp. 119-145.

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Block, J. and Sandner, P., 2009. “What is the effect of the financial crisis on venture capital financing? Empirical evidencefrom US Internet start-ups.” Taylor & Francis Group. 11, No. 4, pp. 295-309.

Cumming, D., D. Schmidt, and U. Walz. 2010. Legality and venture capital governance around the world. Journal of Business Venturing 25, no. 1: 54–72.

DeChesare, B., n.d. Private Equity vs. Venture Capital. [online] Available at: http://www.mergersandinquisitions.com/private-equity-vs-venture-capital/ [Accessed 10 April 2013]

Ibrahim, D.M., 2008. “The (not so) puzzling behavior of angel investors.” Vanderbilt Law Review 66: pp. 1405–1452.

Gompers, P., 1994. “ The Rise and Fall of Venture Capital.” Journal ofBusiness and Economic History. Winter, 23, pp. 1-26

Gompers, P., and Lerner, J., 2001. “The Venture Capital Revolution.”Journal of Economic Perspective. 15, pp. 145-168

Hambrecht, W.R., 1984. “Venture Capital & the Growth of SiliconValley.” Journal of California Management Review. XXVI, pp. 74-82.

Helft, M., 2012. “THE SILICON VALLEY STARTUP'S BEST FRIEND.” FortuneReview. 165, pp. 90-102.

Hellmann, T. and M. Puri., 2000. "The Interaction between ProductMarket and Financing Strategy: The Role of Venture Capital."Review of Financial Studies. 13, pp. 959-84.

Koola, E., 2011. Exit Strategy: IPO Vs Trade Sale. [online] Available at: http://blog.amoo.co.uk/2011/12/exit-strategy-ipo-vs-trade-sale.html [Accessed 16 April 2013]

Lau, A., n.d. Venture capital exits – trade sale vs IPO – compared and analyzed. [online] Available at: http://www.askventure.com/venture-capital-exits-trade-sale-vs-ipo-compared-and-analyzed/ [Accessed 16 April 2013]

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Parikh, V., 2010. Reasons for Buyback of Shares by Company. [online] Available at: http://www.letslearnfinance.com/reasons-for-buyback-of-shares-by-company.html [Accessed 12 April 2013]

Rao, A., 2011. A History of Silicon Valley. [online] Available at: http://www.scaruffi.com/svhistory/sv/chap72.html [Accessed 14 April 2013]

Saxenian, A., 1990. “Regional Networks and the Resurgence of Silicon Valley.” Journal of California Management Review. Fall, 33, 1, pp. 89-112.

Saxenian, A. L. 1994. Regional advantage: Culture and competition in Silicon Valley and Route 128. Cambridge, MA: Harvard University Press.

Saxenian, A. L. (2000). Regional networks and innovation in Silicon Valley and Route 128. In Z. J. Acs (Ed.), Regional innovation, knowledge and global change (pp. 123-138). London: Pinter.

Vries, G.D. and Block, J.H., 2011. “Venture capital syndication in times of economic crisis.” Taylor & Francis Group. 13, No. 3, pp.195-213.

Wong, A., Bhatia, M. and Freeman, Z., 2009. “Angel finance: the other venture capital.” London Times. 18, pp. 221-230.

Zhang, J. (2003a). “Growing Silicon Valley on a landscape: An agent-based approach to high-tech industrial clusters.” Journal of Evolutionary Economics, 13, pp. 529-548.

Zhang, J., 2007. “Access to Venture Capital and the Performance of Venture-Backed Start-Ups in Silicon Valley.” Journal of Economic Development Quarterly. 21, 2, pp. 124-147.

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