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

37 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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