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Profitability of venture capital investment in Europe and the United States

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  • Catarina Dantas Machado Rosa
  • Kristiina Raade

Abstract

This paper examines the profitability of venture capital investment in Europe and the United States. It highlights the unfavourable profitability differential of European venture capital investment in comparison with the United States. The investment performance measures used are the internal rate of return (IRR) and investment multiples. The analysis covers aggregated industry returns and venture capital funds' returns aggregated by vintage year. It relies on the VentureXpert private equity and venture capital performance database, maintained by Thomson Venture Economics. It also considers developments in the private equity and venture capital markets in Europe and the United States.

Suggested Citation

  • Catarina Dantas Machado Rosa & Kristiina Raade, 2006. "Profitability of venture capital investment in Europe and the United States," European Economy - Economic Papers 2008 - 2015 245, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0245
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    References listed on IDEAS

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    1. Alexander Ljungqvist & Matthew Richardson, 2003. "The cash flow, return and risk characteristics of private equity," NBER Working Papers 9454, National Bureau of Economic Research, Inc.
    2. repec:dau:papers:123456789/6431 is not listed on IDEAS
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    Cited by:

    1. Annalisa Croce & Luca Grilli & Samuele Murtinu, 2014. "Venture capital enters academia: an analysis of university-managed funds," The Journal of Technology Transfer, Springer, vol. 39(5), pages 688-715, October.
    2. Murray, Gordon, 2020. "Ten Meditations on (Public) Venture Capital – Revisited," MPRA Paper 104389, University Library of Munich, Germany.

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