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Screening model for the support of governmental venture capital

Author

Listed:
  • Tommaso Minola

    (University of Bergamo
    University of Bergamo)

  • Silvio Vismara

    (University of Bergamo
    University of Bergamo)

  • Davide Hahn

    (University of Pavia
    University of Bergamo)

Abstract

Governmental venture capital (GVC) represents one form of public intervention aimed at alleviating market failures linked to the undersupply of finance to early-stage high-tech firms. However, public sector efforts to promote venture capital activity are not free of limitations and inconclusiveness. Literature has indicated the design of a more effective and efficient investment selection process of GVC as a key driver of the success of public programs; nevertheless, few studies have explicitly focused on the selection processes of GVCs. This exploratory paper does so by concentrating on the screening phase in particular. In the early stages of the investment selection process it is critical that (a) decisions are guided by a clear objective function of GVC and (b) they pick up only a subset of promising ventures on the basis of a selected number of easily applicable criteria. Based on an empirical analysis of growth determinants of a set of New Technology-Based Firms, we build a predictive model of target screening for an effective implementation of the investment strategy that meets the objectives of GVCs. We show the results of its application and discuss implications for both theory and GVC practice.

Suggested Citation

  • Tommaso Minola & Silvio Vismara & Davide Hahn, 2017. "Screening model for the support of governmental venture capital," The Journal of Technology Transfer, Springer, vol. 42(1), pages 59-77, February.
    • Handle: RePEc:kap:jtecht:v:42:y:2017:i:1:d:10.1007_s10961-015-9461-4
    DOI: 10.1007/s10961-015-9461-4
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    4. Power Jane & Power Bernadette & Ryan Geraldine, 2022. "Determinants of equity financing: a demand-side analysis of Irish indigenous technology-based firms," The Irish Journal of Management, Sciendo, vol. 41(1), pages 52-68, July.
    5. Ferreira, Ricardo M. & Pereira, Paulo J., 2021. "A dynamic model for venture capitalists’ entry–exit investment decisions," European Journal of Operational Research, Elsevier, vol. 290(2), pages 779-789.
    6. Yuzhong Lu & Zengrui Tian & Guillermo A. Buitrago, 2021. "Evaluation and selection of Chinese government venture capital investment projects: A research based on analytic hierarchy process and intuitionistic fuzzy set–technique for order of preference by sim," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(4), pages 821-835, June.
    7. Nawab Khan & Haitao Qu & Jing Qu & ChunMiao Wei & Shihao Wang, 2021. "Does Venture Capital Investment Spur Innovation? A Cross-Countries Analysis," SAGE Open, , vol. 11(1), pages 21582440211, March.
    8. Cavallo, Angelo & Ghezzi, Antonio & Dell'Era, Claudio & Pellizzoni, Elena, 2019. "Fostering digital entrepreneurship from startup to scaleup: The role of venture capital funds and angel groups," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 24-35.

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    More about this item

    Keywords

    Governmental venture capital; GVC; VC; Public subsidies; New technology based firms; NTBFs;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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