An Investigation of Public Finance for Potential High Growth Startups: The Case of France

Catherine Deffains-Crapsky (), Jesus Herell Nze Obame and Robyn Owen
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Catherine Deffains-Crapsky: GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement
Jesus Herell Nze Obame: GRANEM - Groupe de Recherche Angevin en Economie et Management - UA - Université d'Angers - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement

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Abstract: The French private equity ecosystem is characterised by the presence of a public investment bank, Bpifrance, which has structured and streamlined the sector since its creation in 2013. On the demand side, this research questions the influence of Bpifrance, as a direct public investor in venture capital, on the length of time between funding rounds and the ability of funded ventures to progress along the financial escalator. To answer this question, data was collected from Dealroom, a platform that provides valuable information on a large number of start-ups in different countries over their actual lifecycle. An event study was conducted on a sample of 1,721 French ventures that raised their first seed funds between January 2000 and January 2019. The main results show that the presence of Bpifrance in the first round of financing has a negative influence on the ability of ventures to move on to a more advanced stage of development. This effect is weaker when the amount raised is taken into account and when the first round of financing is carried out after the creation of Bpifrance in 2012.

Keywords: Government Venture Capital (GVC); Entrepreneurial Finance; Deep Tech; Financial escalator (search for similar items in EconPapers)
Date: 2023-11-08
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Published in ISBE Annual Conference, Nov 2023, Birmingham (UK), United Kingdom

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04380702

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