Venture Capital

Int. J. Entrepreneurship and Innovation Management, Vol. 9, No. 4, 2009

453

Public venture capital: missing link or weakest link? Thierry Rayna

Internet Centre, Imperial College London, South Kensington Campus, 180 Queen’s Gate, London SW7 2AZ, UK E-mail: t.rayna@imperial.ac.uk

Ludmila Striukova*

Department of Management Science and Innovation, University College London, Gower Street, London, WC1E 6BT, UK E-mail: l.striukova@ucl.ac.uk *Corresponding author

Abstract: The aim of the article is to examine whether venture capital trusts (VCTs) meet government’s expectations and help solve the problem of underinvestment in young companies. In order to do so a survey of companies that were funded by one of the VCTs, the Oxford Technology Trust (OTT), was conducted and the results of this exploratory study are presented in this article. VCTs are compared to two recent government initiatives that also target the lack of investment in young firms. Finally, an attempt is made to assess the effectiveness of VCTs, in particular and such policies, in general. Keywords: venture capital trust; VCT; equity gap; business angels; start-ups; enterprise capital funds; ECF; London Technology Fund; LTF; UK. Reference to this paper should be made as follows: Rayna, T. and Striukova, L. (2009) ‘Public venture capital: missing link or weakest link?’, Int. J. Entrepreneurship and Innovation Management, Vol. 9, No. 4, pp.453–465. Biographical notes: Thierry Rayna is a Researcher at Imperial College London where he leads the internet economics team. He holds a PhD in Economics and was a Doctoral Fellow at the French Ecole Polytechnique, after which he became a European Research Fellow at the University of Cambridge. His research investigates the economic consequences of the nature and characteristics of digital goods such as films, music, software and information. Ludmila Striukova is a Lecturer at the University College London. Her previous experience includes working as a Market...