Vlerick Expertise in Accounting & Finance

How do unlisted companies – starters and rapidly growing businesses – finance their growth? How are their potential transfers or buyouts financed? And what impact do financing choices have on their continued development? At the request of the Belgian Federal Science Policy Office, a team of researchers from a number of different universities has been examining these questions. Professor Sophie Manigart was the project leader. Below, she comments on the key results that emerged from the study.

Research literature is awash with studies that describe how angel investors are involved in their portfolio ventures and the various value-adding roles they take on. But how the very nature of their involvement actually influences ventures’ performance, particularly their innovativeness, has so far not been addressed. This research paper examines how task conflicts between angel investors and entrepreneurs are related to the innovativeness of the portfolio companies in question and how this relationship is moderated by the level of agreement on priorities, diversity of entrepreneurial experience, and communication frequency.

Why are some merger and acquisition (M&A) deals closed relatively quickly while others take much more time? The answer to this question is important, because prolonged deal duration is costly and postpones realising synergy gains.

You sometimes hear people claim that “The government shouldn't get involved in the corporate world”. But is this actually the case? Until recently, Professor Sophie Manigart felt it was better for government bodies not to get involved in funding (young) companies. On behalf of the IWEPS, the Walloon Institute for Evaluation, Forecasting and Statistics, she carried out a comprehensive literature study into the funding of young and innovative companies and the potential role of the government in encouraging access to this funding. These days, she has a more nuanced opinion.

A new KPMG International survey has found that 58% of family businesses are currently seeking external financing to fund their investment plans, but finding the right strategic investment partner can be challenging. While family businesses create more than 70% of global GDP many say they find their fundraising options limited.

A socioeconomic impact study under the leadership of Professor Sophie Manigart shows the importance of further support for the Flemish venture capital industry and argues for the expansion of the ARKimedes scheme. Various parameters reveal that the ARKimedes scheme appears to have a significant impact on the Flemish venture economy.

Many big-name companies such as Apple, Rovio (of Angry Birds fame), Spotify, Facebook, Google, Microsoft and Starbucks would never have existed, or certainly never have grown so big, without venture capital. “Venture capital is vitally important for start-up companies that have an idea or perhaps even a prototype, but often no finished product that they can put onto the market,” explains David Devigne, whose doctoral research under Sophie Manigart, professor and expert in venture capital, investigated cross-border venture capitalists and their portfolio companies in Europe. This research has shown that businesses need to think carefully about which financier they take on board. This is because the origin of the capital affects the company’s success.

Merger and Acquisitions (M&As) offer an interesting setting to analyse corporate financial decisions. These transactions might create a sudden need for additional external financial resources, leading to fundamental changes in a company’s capital structure. This case provides an overview of six M&A transactions with their unique features.

The Belgian infrastructure debt market has undergone considerable changes in the past years. Due to low interest rates environment together with new banking and insurance regulations, market players have revised their infrastructure investment strategies. In order to investigate the recent developments in Belgian infrastructure debt market and their origins, professor Issam Hallak and researcher Mathias Wambeke conducted interviews with market players, representative of the different categories: lenders, private equity funds, public entities, financial advisors, and regulators.

While it is true that mergers and acquisitions have seen a moderate decline in the wake of the financial crisis, they continue to be important ways in which to grow or restructure businesses. Even though in the past it were primarily financially sound companies that took advantage of these techniques, nowadays an increasing number of acquisitions involve firms in financial troubles. Thorough academic analysis of such transactions is lacking, however. The research carried out by Evy Bruyland for her doctorate sets about filling this gap.