Abstract:
This paper deals with the question of whether public venture capital (VC) is performing its task properly, taking a look at how public VC companies' selection process, investment behavior, and consulting services reflect goals that differ from those of private VC firms. The results present evidence that public VC firms deliver a different market segment than their private counterparts; for example, their selection process and syndication behavior reveal their predominant goal of promoting the local economy. Although the results indicate that public VC firms are doing what is expected of them, the analyses provide evidence that public intervention should be reconsidered.