The value added by government venture capital funds compared with independent venture capital funds

T. Luukkonen (Corresponding Author), Matthias Deschryvere, F. Bertoni

    Research output: Contribution to journalArticleScientificpeer-review

    38 Citations (Scopus)

    Abstract

    Government venture capital (GVC) funds have been a common policy initiative in European countries to overcome funding gaps in the promotion of early-stage ventures. In this work, we focus on the performance of such government funds. We compare the importance for the firm's development of post-investment, valueadded activities by GVC firms and independent venture capital (IVC) firms. We use a unique data set based on the results of a survey addressed to young high-techVC-backed firms from seven European countries. The survey gauged the importance of the contribution by the first lead investor in a variety of activity areas, as assessed by the investee companies. Attention was paid to potential adverse effects of the post-investment engagement of investors. Using a composite indicator of the value added, we find no statistically significant difference between the two types of investors. However, the profiles of value added differ across investor types, and, in particular, the contributions of IVC funds prove to be significantly higher than those of GVC funds in a number of areas, including the development of the business idea, professionalisation and exit orientation.
    Original languageEnglish
    Pages (from-to)154-162
    Number of pages8
    JournalTechnovation
    Volume33
    Issue number4-5
    DOIs
    Publication statusPublished - 2013
    MoE publication typeA1 Journal article-refereed

    Fingerprint

    Industry
    Lead
    Composite materials
    Investors
    Venture capital
    Value added
    Government
    Venture capital firms
    European countries
    Composite indicators
    Professionalization
    Exit
    Funding
    Venture

    Keywords

    • innovation policy
    • venture capital
    • independent venture capital
    • government venture capital

    Cite this

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    title = "The value added by government venture capital funds compared with independent venture capital funds",
    abstract = "Government venture capital (GVC) funds have been a common policy initiative in European countries to overcome funding gaps in the promotion of early-stage ventures. In this work, we focus on the performance of such government funds. We compare the importance for the firm's development of post-investment, valueadded activities by GVC firms and independent venture capital (IVC) firms. We use a unique data set based on the results of a survey addressed to young high-techVC-backed firms from seven European countries. The survey gauged the importance of the contribution by the first lead investor in a variety of activity areas, as assessed by the investee companies. Attention was paid to potential adverse effects of the post-investment engagement of investors. Using a composite indicator of the value added, we find no statistically significant difference between the two types of investors. However, the profiles of value added differ across investor types, and, in particular, the contributions of IVC funds prove to be significantly higher than those of GVC funds in a number of areas, including the development of the business idea, professionalisation and exit orientation.",
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    The value added by government venture capital funds compared with independent venture capital funds. / Luukkonen, T. (Corresponding Author); Deschryvere, Matthias; Bertoni, F.

    In: Technovation, Vol. 33, No. 4-5, 2013, p. 154-162.

    Research output: Contribution to journalArticleScientificpeer-review

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    AU - Luukkonen, T.

    AU - Deschryvere, Matthias

    AU - Bertoni, F.

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    AB - Government venture capital (GVC) funds have been a common policy initiative in European countries to overcome funding gaps in the promotion of early-stage ventures. In this work, we focus on the performance of such government funds. We compare the importance for the firm's development of post-investment, valueadded activities by GVC firms and independent venture capital (IVC) firms. We use a unique data set based on the results of a survey addressed to young high-techVC-backed firms from seven European countries. The survey gauged the importance of the contribution by the first lead investor in a variety of activity areas, as assessed by the investee companies. Attention was paid to potential adverse effects of the post-investment engagement of investors. Using a composite indicator of the value added, we find no statistically significant difference between the two types of investors. However, the profiles of value added differ across investor types, and, in particular, the contributions of IVC funds prove to be significantly higher than those of GVC funds in a number of areas, including the development of the business idea, professionalisation and exit orientation.

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