Financing innovative, high-growth ventures are difficult given their reliance on intangible knowledge-based assets, high probabilities of failure and asymmetries between entrepreneurs and financiers. Venture capitalists have developed systems over time to cope with this uncertainty and...

This paper provides evidence of the broad government presence in the European venture capital industry. Two forms of intervention are considered: first, direct stand-alone government venture capital funds and, second, indirect private funds to which governments commit funds as limited partners....

The stock market return and the risk of 33 quoted European venture capital companies during the period 1977-1991 are studied. The return is negative on average with eight of the 33 companies having a return that is higher than the market return. However, the systematic risk (measured by the beta...