Venture Capital Investments in Europe and Portfolio Firms' Economic Performance: Independent versus Corporate Investors

Using a new European Commission-sponsored longitudinal dataset – the VICO dataset – we assess the impact of independent (IVC) and corporate venture capital (CVC) investments on the economic performance of European high-tech entrepreneurial firms during the period 1992-2010. After controlling for potential sources of endogeneity and selection bias, our results indicate that both IVC and CVC investments boost portfolio firms' economic performance. These effects are mostly due to an increase in real sales value. Moreover, the dynamics of the impact of VC investments on firms’ overall economic performance and its components – real sales value, real fixed assets, and real labor costs – differs depending on the type of investor. Finally, we do not detect any impact related to the syndication of investments by both IVC and CVC investors.