The role of UK government hybrid venture capital funds in addressing the finance gap facing innovative SMEs in the post-2007 financial crisis era

Robert Baldock and David North

Chapter 8 in Research Handbook on Entrepreneurial Finance, 2015, pp 125-146 from Edward Elgar Publishing

Abstract: This chapter examines how the United Kingdom (UK) government has addressed the equity finance gap since the onset of the recent financial crisis. Drawing on Lerner’s (2010) ‘guiding principles’ for public intervention in the venture capital (VC) market it explores the notion that an equity finance gap may be holding back the growth of innovative small and medium-sized enterprises (SMEs). Using recent demand-side and supply-side research evidence alongside existing literature, the chapter focuses on the following five principles and lessons: (i) government has a justified, catalytic role in addressing the equity finance gap to stimulate research & development (R&D) investment; (ii) the management of funds should be private sector led and governments should resist the temptation to over-engineer; (iii) funds need to recognize the long lead times and investment horizons for sensible exit timescales, sustainability and encouragement for future private VC activity; (iv) government VC funds require the size, scale and flexibility to provide follow-on funding and achieve optimal outcomes for funds and their portfolio businesses; and (v) a global perspective encourages inward investment and foreign VC collaborations opening up overseas markets.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/9781783478781.00014.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:15962_8

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().