What qualities do government-owned venture capital investors seek in a new venture?

Molnár, Endre Mihály and Jáki, Erika (2020) What qualities do government-owned venture capital investors seek in a new venture? VEZETÉSTUDOMÁNY, 51 (11). pp. 64-76. ISSN 0133-0179

Preview

Text 522-Tanulmanyszovege-2752-1-10-20201105.pdf Download (622kB) | Preview

Abstract

Private venture capital (VC) investors usually do not invest in early life-cycle stage startups such as seed and pre-seed companies, since investment size typically doesn’t reach investment thresholds. The entry of governments with fund managers to venture capital markets presents seed and pre-seed companies with the opportunity to receive funding. This paper examines the main investment preferences of Hungarian government-owned venture capital investors regarding pre-seed, seed, and expansion stage startups. Verbal protocol analysis enabled examination of the screening process in real-time in all three life-cycle stages. It is found that governmental VC funds mostly value financial indicators followed by market-related qualities while private VCs value these characteristics in alternate formation. However, in the pre-seed stage, the financial acumen and capabilities of management teams form the main criteria in similarity to angel investors. Governmental VCs also greatly seek innovational value in target firms.

Actions (login required)

Edit Item