Dot.com Price Bubble for the Venture Capital Growth of Digital Companies

Dot.com Price Bubble for the Venture Capital Growth of Digital Companies

Ceren Oral (Fethiye Faculty of Management, Mugla Sitki Koçman University, Turkey) and Göktuğ Cenk Akkaya (Dokuz Eylül University, Turkey)
DOI: 10.4018/978-1-7998-5171-4.ch011

Abstract

Today, innovation performance is an important determinant of competition power and national progress. In the beginning of major innovation, new firms are created to benefit from new digital technologies, and investment and employment in the related industries is increasing. Venture capital (VC) plays an important role in financing venture businesses in the high digital technology sector. The VC market is now accessible at any point in history for ventures. Partly due to the rise of digital entrepreneur incubators, risk capitalists have spread throughout the spectrum. The new digital technology creates an almost constant balloon known as “tech bubble” or “dot com bubble,” which caused economic turmoil in the American stock market in the late '90s. Venture capital companies will be informed about market activity, price bubble history, risk capital, and price bubbles that can have a major impact on their business.
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Research Methodology

The study includes a qualitative research. Especially, a historical analysis of the price bubble has been conducted to evaluate the anomalies that may occur on the stock prices of digital companies with the idea of venture capital. In this context, this study is mostly aimed at determining the situation and aims to provide a basis for future exploratory studies. The research presented in this chapter shows that digital impact has been an important element for the venture capital growth of the companies.

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