Public Support to Entrepreneurial Firms

Abstract

Public intervention in the equity market is justified mainly by the existence of market failures in the financing of some categories of firms. The aim of this article is to survey current public policy in the European venture capital markets. The focus on equity capital is justified by the importance it has had in recent EU programs (e.g., the Risk Capital Action Plan) and the positive impact U.S. public intervention in this market has had on job creation and growth. Examples of direct government involvement in the venture capital markets through public funds commitments are considered and compared.