Has Europe Been Catching Up? An Industry Level Analysis of Venture Capital Success over 1985–2009


  • The authors would like to thank an anonymous referee, as well as Douglas Cumming, Ulrich Hege, and Frédérique Savignac, for useful discussion and suggestions. We also thank an anonymous referee, Philippe Andrade, Juan Carluccio, Hung-Hsia Chu, and participants at the EFM 2010 Symposium on Entrepreneurial Finance & Venture Capital Markets, the University of Maastricht, Banque de France, Bank of Canada, and the 14th International Conference on Macroeconomic Analysis and International Finance for their comments. The views expressed here are solely the authors' and do not necessarily reflect those of Banque de France or the Eurosystem. Correspondence: Stefan Krause.


After nearly two decades of US leadership during the 1980s and 1990s, are Europe's venture capital (VC) markets in the 2000s finally catching up regarding the provision of financing and successful exits, or is the performance gap as wide as ever? Are we amid an overall VC performance slump with no encouraging news? We attempt to answer these questions by tracking over 40,000 VC-backed firms stemming from six industries in 13 European countries and the USA between 1985 and 2009; determining the type of exit – if any – each particular firm's investors choose for the venture.