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The investment strategies of publicly sponsored venture capital funds

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  • Buzzacchi, Luigi
  • Scellato, Giuseppe
  • Ughetto, Elisa

Abstract

This paper investigates the effects of public ownership on the investment strategy of hybrid VC funds. We exploit a unique dataset containing data for all of the venture capital funds in Europe that received financial support from the European Investment Fund (EIF) during the years 1998–2007. The dataset includes 179 VC funds that invested in 2482 companies. We find that the level of public ownership shows a weak negative correlation with the likelihood of observing a write-off and that a higher public share is associated with a longer duration for the investment. The latter effect is more relevant for those investments that generate intermediate financial returns. The results are robust to the introduction of controls at the target firm level and for financial market conditions.

Suggested Citation

  • Buzzacchi, Luigi & Scellato, Giuseppe & Ughetto, Elisa, 2013. "The investment strategies of publicly sponsored venture capital funds," Journal of Banking & Finance, Elsevier, vol. 37(3), pages 707-716.
    • Handle: RePEc:eee:jbfina:v:37:y:2013:i:3:p:707-716
    DOI: 10.1016/j.jbankfin.2012.10.018
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    More about this item

    Keywords

    Public venture capital; Duration; Write-off;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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