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Suggest an estimated internal rate of return (IRR) to characterize three portfolio outcomes
Frédéric Iselin and Etienne Krieger, Affiliate Professors at HEC Paris, have been appointed the International Network of Business and Management Journal (INBAM) Award for the Best Paper presented.
During a conference on "Innovation, Finance and Entrepreneurship " on 3 February 2012, at the Geneva School of Business Administration, Prof. Iselin and Krieger were appointed the INBAM Award for the Best Paper presented.
The paper entitled "You Said Successful? Actual and Perceived Performance of Venture Capital in France ," co-written by Frédéric Iselin, Etienne Krieger, Karim Medjad, Romain Grandsart and Violetta Gerasymenko was published in the 2011 fall edition of the International Journal of Business.
In the paper, using a theoretical financial model depicting a typical capital fund venture specialized in start-up companies (seed / early stage financing), the writers invite professional investors and entrepreneurs to suggest an estimated internal rate of return (IRR) to characterize three portfolio outcomes : "success", "average" and "failure". Their findings reveal a perception that is disconnected from reality, namely a strong propensity to overestimate the notion of success and to underestimate that of failure. In a subsequent phase, the writers intend to use a broader sample to determine if, and to what extent, this is a European bias that calls for a European response.