As Good as Gold? Benchmarking the Impact of Public Support to Venture Capital (Research Square)

Summary

• The European Investment Fund covers about 60% of public intervention in the European venture capital market.p.4
• Between 2010 and 2020, the share of public funding provided by the EIB Group in total European venture capital funds increased by 12%.p.4
• In 2024, the United States venture capital investments market reached $156.6 billion compared to $22.7 billion in Europe.p.6
• Total EIF VC investment allocated to European SMEs and midcaps amounted to €7.1 billion across 11,945 individual investments between 2010 and 2018.p.12
• The matching strategy yielded a final counterfactual sample consisting of 2,971 treated firms and 8,797 control firms.p.16

Key insights

1. Firms receiving EIF-backed venture capital perform on par with comparable firms financed by fully private venture capital across economic and innovation metrics.p.2
2. The European Investment Fund operates primarily through an intermediated delivery model, taking minority limited partner positions in privately managed funds.p.4
3. EIF-backed equity investments achieve exit performance and financing dynamics comparable to or better than fully private venture capital investors.p.5
4. ICT forms the largest single sector of EIF indirect VC allocations, accounting for 42.7% of total investment volume.p.12
5. Data cleaning procedures on completed deals identified 15,621 eligible target companies to serve as potential control candidates.p.14
6. Exact matching combined with propensity score matching effectively eliminates statistically significant pre-treatment differences between treated and control cohorts.p.16
7. Aggregated ATT estimates reveal no statistically significant performance gap in turnover, profits, total assets, or total employment between EIF-backed and private VC-backed companies.p.20
8. Public venture capital intervention is most effective when leveraging the governance structures, skills, and market incentives of private financial intermediaries.p.24