Assessing the impact of public venture capital programmes in the United Kingdom: Do regional characteristics matter?

This paper analyzes whether and how the impact of publicly-backed VC funds varies among regions, depending on their level of innovation intensity, when compared to private VC funds. Our analyses on a sample of 650 VC-backed companies in the United Kingdom in the period 1998- 2007, show for publicly-backed VC funds (when compared to private VC funds): (a) a greater propensity to invest in early-stage and technology-based sectors, (b) a greater ability to attract partners in syndication and (c) lower positive exit rates of investee companies. Furthermore, our findings confirm that regional characteristics matter in rigorously assessing the effectiveness of public VC programmes. Indeed, we show that the performance of companies backed by publicly- supported VC funds varies according to the level of innovation intensity of the regions in which they are located.