Financing With Venture Capital: Advances in Knowledge Over the Last Ten Years and Research Avenues

1. Introduction and Objectives

The mandate for the research, conducted for Industry Canada, aims to meet the following objectives:

• to index and classify academic and professional research, in French and English, as well as public programs and policies that relate to financing by venture capital;
• to identify the primary researchers and centres of expertise on venture capital in Canada and elsewhere;
• to contribute to the definition of a specific research agenda on the venture capital market for SMEs.

Some explanations must be given on meeting these objectives.

1. Only the main programs of foreign governments directly related to a share interest by the government will be inventoried. All Canadian federal and provincial government programs will be omitted from this research.
2. The informal venture capital market, represented by "love money" and "business angels", will be specifically excluded from this report unless studies or documents include both types of markets, namely formal and informal.
3. Moreover, because the financing tools used by venture capital companies are not always identified in the studies or public documents, apart from direct participation in equity, our listing could also take into account other sources of financing usually used in the industry such as debentures (either convertible or not), preferred shares (convertible or not), warrants and other types of loans, whether guaranteed or not.
4. Last, because we primarily used the Internet and electronic periodicals to identify relevant information, our research should not be seen as exhaustive. It is possible that certain information might not have been identified because it was not in electronic form in the appropriate places.

Our mandate being not a synthesis of the literature but rather a compilation of what has been done, the results of our research will sometimes be presented as a compilation of statistics. Sometimes, in view of our experience and knowledge of the field, as well as our access to more complete documents, we reviewed the written material to guide future work.

The following section presents the methodology used, Section 3 provides and comments on the main research topics that were inventoried and Section 4 deals with professional events.