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The Effects of Government-Sponsored Venture Capital: International Evidence

Author: James A. Brander; Qianaian Du and Thomas Hellmann
Date: March 2014

Abstract. This article examines enterprises funded by government-sponsored venture
capitalists (GVCs). We find that enterprises funded by both GVCs and private venture capitalists (PVCs) obtain more investment than enterprises funded purely by PVCs, and much more than those funded purely by GVCs. Also, markets with more GVC funding have more VC
funding per enterprise and more VC-funded enterprises, suggesting that GVC finance largely
augments rather than displaces PVC finance. There is also a positive association between mixed GVC/PVC funding and successful exits, as measured by initial public offerings (IPOs) and
acquisitions, attributable largely to the additional investment.

Geography: Global

Type of study: Academic article

Relevant for: Venture Capital, Fund of funds, Associate

Source: Review of Finance (2014) pp. 1–48

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