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Governmental Venture Capital for Innovative Young Firms - working paper

Author: Colombo, M. G.; Cumming, D. J. & Vismara, S.
Date: July 2014

Governments around the world have set up Governmental Venture Capital (GVC) funds, and are increasingly doing so, with the aims of fostering the development of a private venture capital industry and to alleviate the equity capital gap of young innovative firms. The rationale and the appropriateness of these programs is controversial. In this paper, we borrow from the recent literature on entrepreneurial finance to document the evolution and to compare the effects of the different types of governmental support. In contrast with a lack of success in some countries, there have been successful GVC initiatives, such as the Australian Innovation Investment Fund. Consequently, the proper design of the investment processes of GVC funds is an urgent topic for scholars and policy makers.

Geography: Europe

Type of study: Academic workingpaper

Relevant for: GP Venture capital, Associate, Fund of funds, Limited partners

Source: Colombo, Massimo G. and Cumming, Douglas J. and Vismara, Silvio, Governmental Venture Capital for Innovative Young Firms (July 25, 2014)