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- W1701005145 abstract "This paper investigates the relative performance of enterprises backed by government-sponsored venturecapitalists and private venture capitalists. While previous studies focus mainly on investor returns,this paper focuses on a broader set of public policy objectives, including value-creation, innovation,and competition. A number of novel data-collection methods, including web-crawlers, are used toassemble a near-comprehensive data set of Canadian venture-capital backed enterprises. The resultsindicate that enterprises financed by government-sponsored venture capitalists underperform on avariety of criteria, including value-creation, as measured by the likelihood and size of IPOs and M&As,and innovation, as measured by patents. It is important to understand whether such underperformancearises from a selection effect in which private venture capitalists have a higher quality threshold forinvestment than subsidized venture capitalists, or whether it arises from a treatment effect in whichsubsidized venture capitalists crowd out private investment and, in addition, provide less effectivementoring and other value-added skills. We find suggestive evidence that crowding out and less effectivetreatment are problems associated with government-backed venture capital. While the data does notallow for a definitive welfare analysis, the results cast some doubt on the desirability of certain governmentinterventions in the venture capital market." @default.
- W1701005145 created "2016-06-24" @default.
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- W1701005145 date "2008-05-01" @default.
- W1701005145 modified "2023-10-14" @default.
- W1701005145 title "Government Sponsored versus Private Venture Capital: Canadian Evidence" @default.
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- W1701005145 doi "https://doi.org/10.3386/w14029" @default.
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