The Rise of Venture Philanthropy: private capital and public benefit (original) (raw)

The funding of venture capital in Europe: issues for public policy

This paper considers the key questions facing public policy-makers in the European Union in developing policies to stimulate venture capital. The first is how to define when and where public intervention is necessary and justifiable. The second is to identify precise policy objectives. Thirdly, should the public sector take the same or more of the risk and less of the return than the private sector? Then, what instruments should the public sector deploy (equity, grants, guarantees or loans, or a combination)? Finally, when should public intervention cease? The paper considers the experience of instruments at both European and national levels and some of the policy debates. It concludes with reminders that venture capital is not the most appropriate form of finance for all small businesses; that venture capital will not in any case succeed in promoting growth unless an appropriate framework exists also on the demand side to support the emergence of growth companies; and that venture capital in Europe must be complemented by the growth of entrepreneurial finance from other sources, notably business angels, who have played a key role in the US experience.

European venture capital: Strategies and challenges in the 90s

European Management Journal, 1990

This paper summarizes the current perceptions of leading European venture capitalists as an aid to those involved in formulating strategies or determining public policy. Secondarily, it provides an excellent view of venture capital in the 1990s against which actual developments may be compared. These views are developed in a survey of 34 firms, which manage over onequarter of the European venture capital pool.

The Changing Face of the European Venture Capital Industry

The Journal of Private Equity, 2004

We would like to thank the many venture capitalists who generously provided us with data. We owe a special thank to March Schublin at the European Investment Fund for supporting this project from day one. Elena Rotondi cheerfully and efficiently helped us at all stages. Our colleague Pietro Terna at Turin University made the online collection of data possible. Last but not least, Roberto Bonfatti, Matteo Ercole and Alessandro Gavazzeni provided long hours of outstanding research assistance.

Public versus private venture capital: seeding or crowding out? A pan-European analysis

Journal of Business Venturing, 2003

This paper analyzes the relationship between public and private sources of venture capital in Europe and the development of the industry, controlling for characteristics of the legal systems, in 15 European countries over the period 1990-1996. Large public participation is correlated with smaller VC industries, but analyses do not support the view that public venture capitalists are acting to seed the industry or that are they crowd-out private funds. On the contrary, public involvement seems to cause greater amounts of money to be invested in the industry as a whole. We argue that the effects of public intervention, whatever the motives, are real and probably result from demonstrating/sanctioning the social merit of venture capital and from signaling an enduring commitment to it.

Current state and latest development of social venture capital in Europe

WSB Journal of Business and Finance

The article aims at providing characterisation of social venture capital in Europe. The introductory part of the contribution deals with its origins and classification. The attention is devoted to various factors that have led to emergence of SVC such as existence of market gap, global crisis, monetary policy, disintermediation and financial innovations. The article also emphasises the fact that there is no unified market and, moreover, that the boundaries between social institution and traditional investors are becoming blurry. The main contribution of this article is to characterise the current state and to describe the latest development of SVC in Europe. The focus of analysis was aimed at defining the investment focus, priorities and resources of SVC. Western Europe is the main target region of SVC during all examined period, followed by Africa and Asia. In all years, top financial beneficiaries are people suffering from poverty followed by children and youth. Amongst the top fi...

Venture Capital and Innovation in Europe

SSRN Electronic Journal, 2008

We would like to thank Ms Jennifer Vandermosten and the European Venture Capital Organization (EVCA) for making available to us their European VC data base. This research project is co-financed by the E.U.-European Social Fund (75%) and the Greek Ministry of Development-GSRT (25%).

Venture capital in Europe and the financing of innovative companies

Economic Policy, 2002

Venture capital is considered to be the most appropriate form of financing for innovative firms in high-tech sectors. Venture capital has greatly developed over the last three decades in the United States, but much less so in Europe, where policy-makers are striving to help channel more funds into this form of financial intermediation. In this paper we provide the first assessment of venture capital in Europe. We document its development in the 1990s and compare it with that of American venture capital. We find the wedge between them to be large and growing. We then look at the involvement of venture capital with some of Europe's most innovative and successful companies, those listed on Europe's ‘new’ stock markets. Venture capital is effective in helping these firms overcome credit constraints, and thus to be born in the first place. Using a unique, hand collected data set from the listing prospectuses and annual reports of these companies, we find European venture capital to have a limited effect on their ability to raise equity capital, grow, and create jobs. We conclude that public support of the European venture capital industry should look at both its growth and at its maturation.

The profile of venture capital investments: the european context

2016

The aim of this paper is to deepen our understanding of the investment valuation process followed by venture capitalists (VCs) at the European level. Its contribution is twofold. First, we shed light on the manner in which VCs estimate the investee companys value and operationalize the main variables involved in the practical application of the well-known discounted cash flow method. Second, we study whether the different degree of use of valuation methods across European countries may be explained by differences in institutional characteristics related to the underlying legal regime (i.e, English vs German vs French-based legal traditions). Using both univariate and multivariate analysis for a sample of 99 responses obtained from a survey addressed to VCs from the UK, France, Germany and Italy, we find that both legal systems and characteristics of VCs (i.e., experience, preferred investment stage, and main source of funds) do influence in the valuation methods used.