Public policy support for the informal venture capital market in Europe a critical review

C.M. Mason

Research output: Contribution to journalArticle

63 Citations (Scopus)

Abstract

The ability of small firms to access finance is hindered by persistent market failure, which creates funding gaps for new businesses, particularly in technology sectors, seeking small amounts of finance. This has prompted various forms of public sector intervention to increase the supply of both debt and risk finance. For the past decade (longer in the UK) both the EU and its member states have increasingly focused on the informal venture capital market as a means of increasing the supply of early stage venture capital. This article describes the changing nature of the forms of intervention and provides a critical review of their effectiveness. The lack of data on angel investing means that there is very little evidence on the impact of these forms of intervention. The article advocates that governments should invest in appropriate methodologies which can accurately measure investment trends in the early stage venture capital market, and specifically angel investment activity, so that the need for public sector intervention can be demonstrated and the impact of such interventions can be measured.
LanguageEnglish
Pages536-556
Number of pages20
JournalInternational Small Business Journal
Volume27
Issue number5
DOIs
Publication statusPublished - Oct 2009

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Informal venture capital
Capital markets
Public policy
Venture capital
Public sector
Finance
Access to finance
Market failure
Funding
Investing
Government
Debt
Small firms
New business
Investment activity
Methodology

Keywords

  • business angel networks
  • business angels
  • co-investment schemes
  • investment readiness

Cite this

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Public policy support for the informal venture capital market in Europe a critical review. / Mason, C.M.

In: International Small Business Journal, Vol. 27, No. 5, 10.2009, p. 536-556.

Research output: Contribution to journalArticle

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