The Causes and Consequences of Venture Capital Financing. An Analysis based on a Sample of Italian Firms

The analysis of the determinants and the effects on firm performance of venture capital finance for a sample of Italian enterprises indicates that small, young and more innovative firms are more likely to be financed by a venture capitalist. Our results confirm that venture capital can help reduce financial constraints for firms that are more difficult for external investors to evaluate. We also show that larger firms resort to venture capitalists when their indebtedness with banks is high and we find evidence that venture capital financing is more frequent after periods of high growth and investment, a result that points to the advisory role of the venture capitalist. A novel result emerges; venture capital also finances firms with multiple banking relationships. In the presence of multiple lending, banks could have greater difficulty monitoring firms with asymmetric information; moreover, if firms default, banks are likely to have a weaker bargaining position. In these cases, the amount of bank credit is probably near its limit and firms need to resort to venture capital, a contract that reduces the amount of guarantees needed to access external finance.Venture capital, Private equity

Private equity and venture capital in Italy

This paper examines private equity and venture capital in Italy. The first part looks at the main features of the Italian market and its recent evolution; the second part considers the results of a survey of firms and intermediaries designed to gather information regarding contract features and the characteristics of investee firms and investing intermediaries. Finally, the paper discusses the main obstacles to the development of the sector using information from the survey of intermediaries.private equity, venture capital

Il private equity in Italia

Questo lavoro analizza l’industria del private equity e venture capital in Italia. In una prima parte si descrivono le caratteristiche e l’evoluzione del mercato italiano. In una seconda parte il lavoro propone i risultati di un’indagine effettuata attraverso interviste alle imprese e questionari rivolti agli intermediari, effettuati dalla Banca in collaborazione con l’AIFI (Associazione italiana del private equity e venture capital), al fine di ricavare informazioni sulle caratteristiche dei contratti utilizzati, delle imprese finanziate e degli intermediari. Infine, si discutono i principali fattori di ostacolo al maggiore sviluppo del private equity in Italia, utilizzando le informazioni ricavate dai questionari rivolti agli intermediari