VENTURE CAPITAL IN EUROPE'S COMMON MARKET: A QUANTITATIVE DESCRIPTION

Abstract

This paper offers a quantitative description of European private equity markets and compares the recent development in these markets with the development of the US venture capital market. European markets for private equity vary considerably with respect to the investments in young high-technology enterprises, as well as with respect to the types of passive investors who invest capital in private equity funds. In some countries, private equity investors predominantly receive capital from banks, in others the main capital providers are pension funds, while in a third group of countries, governments play an important role in providing financial means for young high-technology enterprises. The paper also addresses the differences between private equity investors acting in a single national market by analysing micro data on French and German private equity investors. German private equity investors differ considerably with respect to the degree of specialization on particular stages of enterprises' development and particular technologies, while French investors vary only slightly. In Germany, independent equity investors have a higher degree of specialization on stages and technologies than their dependent counterparts whose investment strategy is affected by their capital providers. French independent equity investors are less specialized on particular technologies than German independent equity investors.

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