Despite its importance, this issue has never elicited much interest in terms of academic research. However, some results from recent empirical studies can be cited.
The activity, or better still, the ability to raise funds is strongly correlated with the track record of the player in question from the previous year. Specifically, historic returns on transactions undertaken in the past and the amount of resources made available by the market are particularly indicative variables.
The size of private equity investors is directly proportional to their capacity for fundraising, and this capacity is a function of certain factors: market conditions, the structure of venture capital investors, the type of investment in which resources are channeled, the financial instruments that are held by the private equity player with respect to the deal, the level of development, and the sector in which the companies do business.
Fundraising performance does not depend solely on expected and historic returns, or on the “joy of giving” of resource providers. Instead it is also linked to factors that are not purely financial, such as reputation building or the future ability to carry out transactions.
In this context, the importance of contractual formulae and clauses emerges within the relationships between suppliers of financial resources and investors in venture capital: the structure of the agreement between the parties can impact the success of the fundraising phase, and consequently, the outcome of later investment policies.