Selection Criteria In Governmental and Private Venture Capital - A comparison
Abstract
Companies have, during recent years, increased the amount of venture capital (VC) that they invest
in smaller start-ups. Today, private venture capitalists (PVC) and governmental venture capitalists
(GVC) have sensed the value of such investments. The available literature comparing the decision
criteria between GVCs and PVCs is scarce. Therefore, this study will explore how the two differ in
their investing criteria pre-investment. Several interviews with Swedish venture capitalist firms were
conducted where information about their criteria was gathered. From this, the findings were that GVCs
and PVCs prioritise similar things when investing but to different degrees in some areas. The most
important area that all firms consider to gain the desired results is the personality and determination of
the start-up team. In other areas, such as sustainability and geography, there is a significant difference
that can be prioritised between GVCs and PVCs, where GVCs invest in a much broader perspective
since they have to benefit society by investing in underfunded areas. While PVCs may focus more on
investing in established geographical regions with a proven track record of success and do not have
the exact requirement to be as sustainable as the GVCs. However, some PVCs have also identified
the potential with the positive correlation between sustainability and return on investment, making
sustainable portfolio companies an attractive option.
Degree
Student essay
Date
2023-02-27Author
Evheden, Nils
Gardestrand, Joel
Gerber, Philip
Keywords
Decision criteria, Pre-investment, Venture capital, Swedish venture capital, Private venture capital, Governmental venture capital, and Comparison venture capital.
Series/Report no.
IFE 22/23:10
Language
eng
Metadata
Show full item recordRelated items
Showing items related by title, author, creator and subject.
-
Mixed Venture Capital Syndicates: How Independent Venture Capital Firms Evaluate Corporate Venture Capital Arms as Syndication Partners
Misurák, Sebastian; Steen, Philip (2018-07-06)Background and Problem Formulation: Since 2012 there has been a steady increase of corporate venture capital (CVC) activity in The Silicon Valley. In 2017 more than 20 % of the total venture capital investment was made ... -
Offentliga venture capital-bolags motiv till att syndikatinvestera
Höijer, Josefin; Atie, Josephin (2017-07-06)This paper examines the incentives among governmental venture capital-firms in Sweden to syndicate their investments. The results are based on qualitative, semi-structured interviews with investment managers at six ... -
Underpricing of Venture Capital-Backed IPOs
Hjern, Oskar; Stankovic, Marko (2020-06-29)This thesis researched the effect of Venture Capital ownership on underpricing in IPOs. We conducted OLS-regressions on two data samples consisting of IPOs in the Nordics between 2009 and 2019. Two samples were collected, ...