The Italian venture capital market

Raffaele Gallo (), Federico Maria Signoretti (), Ilaria Supino (), Enrico Sette, Paolo Cantatore () and Marco Luigi Fabbri ()
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Raffaele Gallo: Bank of Italy
Federico Maria Signoretti: Bank of Italy
Ilaria Supino: Bank of Italy
Paolo Cantatore: Bank of Italy
Marco Luigi Fabbri: Bank of Italy

No 919, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper describes the characteristics of the Italian venture capital (VC) industry, a key sector to foster the creation and growth of innovative firms. Despite a recent increase, VC investment in Italy is still limited in comparison with the other main European economies. The reasons for this gap can be grouped into three broad factors that affect all the stages of the start-up lifecycle, interacting and negatively reinforcing each other. First, in Italy there are relatively few innovative and marketable ideas, which limits demand for venture financing in the first place. Second, the domestic VC fund industry is undersized compared with France and Germany, reflecting the low involvement of domestic institutional investors and the lagged start of public investment in this sector. Third, in Italy there are comparatively fewer opportunities for successful exits from VC investment, which is an obstacle to investment in the first place. Against this background, public policy should continue to support the growth of the Italian VC ecosystem; given the interdependencies along the entire VC value chain, policies should address weaknesses across multiple dimensions.

Keywords: venture capital; start-ups; innovation; investment funds (search for similar items in EconPapers)
JEL-codes: G23 G24 G32 (search for similar items in EconPapers)
Date: 2025-04
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