The changing patterns of venture capital investments in Europe

In this paper we analyse the changes in the patterns of investments for venture capital (VC) investors with different governance structures. We distinguish independent, corporate, bank-affiliated and governmental VC investors. Focusing on a sample of VC investments made in the period 1998-2014 in 28 EU-member countries and Israel, we compute specialization indexes for each investor type along five dimensions (age and industry of target, geographical distance; cross-border and syndicated investments) and compare their evolution across four time periods (booming internet bubble: 1998-2001, bursting post-bubble: 2002-2004, post bubble recovery: 2005-2007, global financial crisis: 2008-2010, and post global financial crisis 2011-2014). We find interesting trends in how investors with different governance structures changed their patterns of investment across time, highlighting the importance of considering the dynamic nature of the VC ecosystem.