Governments as venture capitalists

OECD governments are acting as venture capitalists by providing funds to small high-risk firms, with the aim of stimulating innovation and increasing employment. The plan is to raise the survival rates of high-technology start-ups, less than half of which last for five years. But critics charge that...

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Bibliographic Details
Published in:The OECD observer 1998-08, Vol.213 (213), p.26
Main Authors: O'Shea, Margaret, Stevens, Candice
Format: Article
Language:English
Subjects:
Capital
Capital gains
Companies
Developing countries
Economic aspects
Economic policy
Employment
Equity
Finance
Financial institutions
Financing
Funding
Funds
Government
Government agencies
Government programs
Government spending policy
Government sponsored enterprises
Guarantees
High tech industries
High technology industry
Innovation
Innovations
Institutional investments
International economic organizations
Investment
Investments
Investors
Manycountries
Money
Networks
Pension funds
Political aspects
Public administration
Public finance
Public services
Risk
Small & medium sized enterprises-SME
Small business
Small business loans
Startups
Survival
Tax credits
Taxation
Technical assistance
Technology
Training
Venture capital
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Summary:OECD governments are acting as venture capitalists by providing funds to small high-risk firms, with the aim of stimulating innovation and increasing employment. The plan is to raise the survival rates of high-technology start-ups, less than half of which last for five years. But critics charge that these schemes can lead to bad investments at high cost to the taxpayers. Government venture-capital funds, like their private counterparts, should supply companies with more than just money. Start-up firms require advice about management, strategy and finance. Government programs have the advantage that they can link firms into an entire array of public services - technical assistance, management training, information networks - thus nurturing young companies over the longer term.
ISSN:0029-7054
1561-5529