How well does venture capital perform in France ?

Sahut, Jean-Michel ; Mnejja, Anis

In: International Journal of Business, 2011, vol. 16, no. 2, p. 165-181

The main objective of this article is to examine the financing of venture capital in France, and in particular, the performance of Mutual Funds for Investment in Innovative Enterprises (FCPIs) which represent around 50% of venture capital funds raised. After a review of the literature, we assess the performance of FCPIs based on the study of 127 funds launched between 1997 and 2005. We show that... Plus

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    Summary
    The main objective of this article is to examine the financing of venture capital in France, and in particular, the performance of Mutual Funds for Investment in Innovative Enterprises (FCPIs) which represent around 50% of venture capital funds raised. After a review of the literature, we assess the performance of FCPIs based on the study of 127 funds launched between 1997 and 2005. We show that their performance is characterized on the one hand by a "J curve" that we validate empirically and, on the other hand, by an average profitability which remains low considering the risks incurred. The attraction of these funds, except for a few rare exceptions, comes from the tax incentives which they provide.