The capital gap for small technology companies: public venture capital to the rescue?

The capital gap for small technology companies: public venture capital to the rescue? In this paper, we analyze effectiveness of public intervention for fostering private venture-capital market in Spain. We use a sample obtained from VentureXpert database, consisting of 755 investments made by 83 Spanish public and private venture capitalists that closed at least one fund between 1997 and 2008. We compare the investments undertaken by private and public investors before and after public venture capital programs were started. We found that Spanish venture-capital market has rapidly developed in the last 10 years and that this development coincides with the establishment of public policies for encouraging technology entrepreneurship. We also found that other factors, such as previous experience of investors and size, have also contributed to fostering more high-risk investments. These results may encourage governments in other countries to start or keep working to promote private venture-capital investments. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

The capital gap for small technology companies: public venture capital to the rescue?

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Publisher
Springer US
Copyright
Copyright © 2010 by Springer Science+Business Media, LLC.
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-010-9275-6
Publisher site
See Article on Publisher Site

Abstract

In this paper, we analyze effectiveness of public intervention for fostering private venture-capital market in Spain. We use a sample obtained from VentureXpert database, consisting of 755 investments made by 83 Spanish public and private venture capitalists that closed at least one fund between 1997 and 2008. We compare the investments undertaken by private and public investors before and after public venture capital programs were started. We found that Spanish venture-capital market has rapidly developed in the last 10 years and that this development coincides with the establishment of public policies for encouraging technology entrepreneurship. We also found that other factors, such as previous experience of investors and size, have also contributed to fostering more high-risk investments. These results may encourage governments in other countries to start or keep working to promote private venture-capital investments.

Journal

Small Business EconomicsSpringer Journals

Published: Apr 16, 2010

References

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