New technology-based firms in Europe: market penetration, public venture capital, and timing of investment

We investigate the effect of public (PUVC) and private (PRVC) venture capital funds on the sales growth of 6513 European New Technology-Based Firms (NTBFs) during the period from 1992 to 2009. Our results show that PUVC-backed NTBFs underperform with respect to PRVC-backed ones and do not grow more than non–venture capital-backed companies. The impact of PUVC is still not statistically significant (even though it is positive) when PUVC funds target young NTBFs. The only notable exception suggesting a positive and statistically significant impact for PUVCs is when PUVC funds cofinance with PRVC funds, and both target young firms.