Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/261494 
Year of Publication: 
2022
Series/Report no.: 
Research Paper No. 21
Publisher: 
EcoAustria - Institute for Economic Research, Vienna
Abstract: 
In this paper we analyze how different types of venture capital investments - private, public and indirect public - affect performance of portfolio companies. We use data on more than 20,000 VC deals in Europe between 2000 and 2018 and we hand collected a unique dataset on the institutional setting (public/indirect/private) of almost 5000 investors. We find that public VC investors perform consistently worse than purely private ones, while indirect public investments (such as the "Juncker Plan" or InvestEU investments) perform consistently better. We link these findings to the fact that public funds do not enter the best performing cliques of investments. On the other hand, indirect funds invest in the VC funds with the best network characteristics, which raises a question of whether indirect VC investments are associated with a high level of windfall gain, and not necessarily improve the value added by the VC funds. We confirm the main conclusions using instrumental variables' specifications.
Subjects: 
venture capital
network analysis
governmental venture capital
European Investment Fund
syndication
public policy
JEL: 
G24
G28
H81
L26
D73
Document Type: 
Working Paper

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