Public grants beneficiaries and venture capital-backed firms: a tale of two funding strategies
比较欧洲SME Instrument公共资助与风险资本支持企业的特征，发现公共资助偏向规模较小、较成熟的企业，而风险资本更青睐年轻、创新型企业，提示公共资助标准可能需要调整以更好支持早期高风险项目。
Although firm characteristics play a crucial role in predicting future performance, public agencies often overlook these factors in their funding decisions, unlike Venture Capital investors. This oversight may have implications for the pay-offs from publicly allocated funds and the achievement of policy objectives. To explore the role of firm characteristics in receiving public grants and Venture Capital funding, we compare the characteristics of beneficiaries of the SME Instrument—one of the most innovative funding instruments for innovative companies in Europe—with those of VC-backed firms. Our findings reveal different funding strategies: Venture Capitalists tend to fund younger and more innovative firms, while SME Instrument grants lean towards smaller and older companies. These trends persist even when considering factors such as bank indebtedness and profitability. Additionally, firms that are more profitable are more likely to secure public grants than VC-backed counterparts are. The difference in funding strategies may be related to the varying levels of risk tolerance of public agencies and Venture Capitalists, with the public agency potentially being more risk-averse than its private counterparts are. Our study underscores the potential need to refine the selection criteria of the public funding program to align it with the expected role of public funding in de-risking uncertain ventures in their early development phase.