Samuele Stasi
The “chicken or egg” problem between venture capital and start-up growth.
Rel. Marco Cantamessa. Politecnico di Torino, Corso di laurea magistrale in Ingegneria Gestionale (Engineering And Management), 2023
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Abstract
The amount of venture capital invested in a country is typically viewed as the financial input needed for innovation-enabled economic growth. However, given how VCs function, it may also be viewed as a proxy for their expectations for this growth. So, if venture capital investment is low, it may be wiser to interpret this as a signal that something else in the economy needs to be corrected rather than the problem itself. The dearth of venture capital investments is impeding start-ups and economic growth, and it has led to a debate on whether or not it is right for governments to intervene to bridge the equity gap in the start-up and VC ecosystem.
Specifically, one side of the discussion believes that governments, with their involvement, would be able to generate a signalling effect, which will attract private investors (i.e., VCs), as well as an elimination of barriers to entry, tax breaks for research and development expenditures, and more favourable capital gain taxation
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