EURO 2024 Copenhagen
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4341. Venture Capital: Drivers of Growth

Invited abstract in session WB-2: Optimal Portfolio Strategies, stream OR in Banking, Finance and Insurance: New Tools for Risk Management.

Wednesday, 10:30-12:00
Room: Glassalen (building: 101)

Authors (first author is the speaker)

1. Mattia Margonari
Sapienza Universita' di Roma

Abstract

The venture capital market, a private alternative investments form, has gained increasing attention and importance in recent years. Key industry metrics such as assets under management, average funding valuation, and the number of funds and startups have risen sharply, making 2021 a record year for the sector.

Several studies have shown that this industry contributes greatly to the development of countries' economies (LERNER; TÅG, 2013). The United States, a market where venture capital originated and which has been instrumental in its development, has long been able to benefit from the positive effects of a well-organized venture capital market: increased technological spillover effects, companies that are among the most highly capitalized on the stock market, and more employment (through VC backed companies) are just some of the benefits that the U.S. market has enjoyed (LERNER; NANDA, 2020; TOM, 2019). However, in the post COVID 19 era, capital raising and performance metrics are no longer in line with the industry's former standards and show a somewhat different landscape.

Against a backdrop of complex and difficult global context, this paper first examines what the growth drivers of VC are in relation to regional and national macroeconomic variables in Europe and what changes the venture capital market drivers have experienced from external shocks (e.g.: due to the COVID-19) (GOMPERS; GORNALL; KAPLAN; STREBULAEV, 2020).

Keywords

Status: accepted

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