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

3.7 Conclusions: state of knowledge and avenues of research

The presentation of the preceding works and their classification by identified research topics show that greater importance is given to the supply of venture capital, the functioning of markets and the initial public offering.

We have melded the subjects that deal directly with venture capital supply (1.1, 1.2, 1.3, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6 and 5.1), those that focus more on the balance between supply and demand or on the point of view of VCC and SME (1.4, 3, 5.2) and, finally, those in which the point of view of SME is more dominant (4.1, 4.2, 5.3, 6.1, 6.2) to show the volume of research in each of them.

Figure 10 confirms the paucity of works specifically on demand, which makes any conclusion on the balance between supply and demand of venture capital dangerous. As mentioned before, access to quantitative data and to market actors is certainly an important explanatory factor. This is a major problem in the development of knowledge for the purpose of conducting an evaluation of the market so that adjustments can be made.

Figure 10: Distribution of Studies by their Area of Interest

D

Given our experience, and in light of the survey conducted, we think it is important to dedicate a certain number of works to the following aspects in order to increase our understanding of the venture capital market.

• The attitude of entrepreneurs toward venture capital: knowledge, use, receptivity, willingness to share control, experiences, etc.
• The needs of SME in terms of financing: types of businesses, level of risk, stage of development, alternatives to financing, potential for development (exporting, expansion, innovation), etc.
• Methods for evaluating the risk of financed projects and the intervention of VCC: contracts, restrictive clauses, costs of financing, monitoring of the investment, etc.
• The relevance of a stock market for rapidly-growing SME: financial preferences of entrepreneurs, volume of activity, possible substitutes, facing reality, costs and operations of such a structure in relation to economic benefits, etc.
• The role of the state in the venture capital market: forms of participation, complementarity with current institutions, intervention with businesses that are risky but that have strong potential (innovation, start-up …), etc.
• The special features of innovation projects and of businesses with a high number of invisible assets: stages of development, risk, contract, rate of success, etc.

Surveys of businesses that had accepted venture capital financing, of others that had refused, of some that had had difficulties and others that had been successful would be necessary to get a more objective picture of the situation. We know that the academic and professional research published deals much more with success stories than with failures – hence the importance of the comments we made on the subject.

Moreover, empirical research on a large number of works should be carried out in academic contexts where fundamental questions can be the object of hypotheses to be verified. This form of research is usually done in all objectivity and provides an impartial view on the true functioning of markets, which would be desirable given the current state of knowledge.