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Business & Economics

INNOVATIVE FINANCING SOLUTIONS BASED ON VENTURE CAPITAL AND PRIVATE EQUITY TO SUPPORT THE DEVELOPMENT OF ENTREPRENEURSHIP IN ROMANIA
Gabriela Prelipcean, Mircea Boscoianu, Mariana Lupan, Carmen-Eugenia Nastase

ABSTRACT.The financing of SMEs designed to lead to the development of entrepreneurship in Romania is critical and requires special attention. The focus is on the innovative solutions offered by VCF and PEF. This study aims to present the performance elements which could provide important information regarding the VCF and PEF investors, but also regarding the portfolio companies which benefit from these funds. Based on the viewing patterns of the PEF strategies offered by Bacon (2004) and Hoskisson et al. (2013), this paper proposes the cube with eight elements that provide the basis for understanding the specificity of emerging markets. The analysis of the VCF/PEF is based on an analytical model for assessing the performance of VCF/PEF as a close-end fund with dividends flow based on generalized Wiener process, a versatile mathematical tool used for assessing financial asset prices in terms of uncertainty and excessive volatility .

KEYWORDS: entrepreneurship, emerging markets, venture capital fund (VCF), private equity fund (PEF), portfolio strategy (Wiener process).

JEL classification: L26, G11, G24, G32.