European Venture Capital Markets: Fund Providers and Investment Characteristics

Abstract

This study determines whether fund providers' investment preferences affect the investment characteristics of venture capital companies and venture capital-backed firms.This concept is considered in light of data from the European Venture Capital Association (EVCA), which reports the amount of funds offered by various fund providers and the allocation of investments across various types of venture capital companies and venture capital-supported firms in 17 Western European countries. Regression analyses of the data, which cover the period between 1991 and 2001, reveal that fund providers' investment preferences do indeed have an impact on venture capital investment characteristics.More specifically, academic institutions, pension funds, and insurance companies often prefer to invest in enterprises in their early stages, while banks and public authorities generally prefer to invest in more mature enterprises. (SAA)

Keywords: Experimental/primary research, Investors, Information industry, Venture capital, Pensions, Early stage financing, Banking industry