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The role of government venture capital funds: recent lessons from the UK experience
Mac an Bhaird, Ciarán; Owen, Robyn; North, David
We investigate the effectiveness of government backed venture capital schemes (GVCs) in funding early stage entrepreneurial ventures. Addressing fundamental issues of additionality, crowding out, economic impact and sustainability, we discover that UK GVC-backed schemes have evolved to provide more effective, targeted, funding for high growth potential firms. Combining primary data from a number of sources, we discover positive impacts of increases in turnover and employment in funded ventures, along with effective targeting of specific funding gaps. Significant issues remain, including a lack of liquidity in follow-on funding and a requirement for longer time horizon in funds, as firms typically fall behind in development schedules. There is, therefore, a need for greater flexibility in GVC-backed funds. Policy designers should be cognisant of the changing external financing ecosystem when designing co-investment schemes.
Keyword(s): Economics; Finance; Government venture capital funds (GVCFs); Global financial crisis (GFC); Co-investment funds; Venture capital; Business angel financing.
Publication Date:
2019
Type: Other
Peer-Reviewed: Unknown
Language(s): English
Institution: Dublin City University
Citation(s): Mac an Bhaird, Ciarán ORCID: 0000-0003-2863-3398 <https://orcid.org/0000-0003-2863-3398>, Owen, Robyn ORCID: 0000-0003-4241-3367 <https://orcid.org/0000-0003-4241-3367> and North, David ORCID: 0000-0003-4925-6392 <https://orcid.org/0000-0003-4925-6392> (2019) The role of government venture capital funds: recent lessons from the UK experience. Strategic Change, 28 (1). pp. 69-82. ISSN 1086-1718
Publisher(s): John Wiley & Sons
File Format(s): application/pdf
Related Link(s): http://doras.dcu.ie/22958/1/Owen%2C%20North%2C%20MacanBhaird1.pdf,
https://doi.org/10.1002/jsc.2247
First Indexed: 2019-02-01 06:05:51 Last Updated: 2019-02-09 06:06:34