GOVERNMENT VENTURE CAPITAL PROGRAMS

Governmental bodies around the world are paying increasing attention to the subsidization of research and development through venture capital programs. In both the US and Canada, approximately 90% of all venture capital investments are in the technology sectors. The perceived importance of developing the knowledge-based high-tech sectors has led to a large number of government programs designated to subsidize through direct government venture capital funds and tax policies. This chapter presents evidence on how governments offer venture capital support programs in different countries with mixed performances. We further discuss evaluation tools for government venture capital and highlight several pitfalls that future studies of government venture capital should avoid and how future studies could provide more helpful and unbiased policy suggestions to the government.