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

4. Structure of the Venture Capital Market: Professional Associations and Events

This section presents information on the main professional associations and major events (conferences, symposia, fora, etc.) related to venture capital around the world.

4.1 Professional associations

We have identified 61 professional associations around the world, the majority of which are in the United States and Europe; none could be found on the African continent. The absence of associations in Africa does not preclude conferences being held on that continent (see Table 5) under the aegis of a professional body. This distribution is presented in Table 4, below.

Table 4: Geographic Distribution of the Main Professional Associations Related to Venture Capital

Continents	Number of Associations
America:	25
Brazil	1
Canada	2
United States	22
Asia (10 countries)	12
Europe (19 countries)	22
Australia/Oceania (2 countries)	2
Total	61

The appended computer file (tab – Associations) contains the list of 61 associations with the following information, when it was available:

• the name of the association;
• the mission;
• country of origin;
• key contact person (often the chairperson of the association);
• Internet address; and
• additional comments that were judged to be relevant.

The description of the mission of each association, as found on the Internet sites, allowed us to demonstrate their diversity and the main roles that they play, namely:

• to represent the members before the appropriate bodies, be they local, national or international;
• to promote the venture capital industry in the country, the state or the continent, as the case may be;
• to facilitate access to financing for businesses seeking capital;
• to collect data, often in the form of surveys, and to compile them and distribute them to the members and other interested persons;
• to organize conferences and various events to inform the members of new national or international trends in the industry, or simply to allow members to meet and to exchange information (see section 4.2);
• to offer support to members by allowing them to benefit from the expertise of certain specialists; and
• to implement and ensure compliance with a code of business ethics.

The "comments" column of the file specifies information compiled by these associations and accessible by Internet.

The association identified in Poland seems involved mainly in investment activities and would not act in the same capacity as the associations that were inventoried in the other countries. In addition, depending on the country's economic development and the size of its industry, certain associations also concern themselves with problems of entrepreneurship (Hawaii) or with financial markets (France and the Czech Republic).

The major concerns of these associations include the future of the industry and the various legal and taxation constraints that could slow the development of venture capital (that is particularly the case of Germany).

Their specialization or areas of interest based on their missions are rather general. The associations target start-up businesses, especially fast-growing ones, in all the sectors. Others are more specifically interested in technology (Western Association of Venture Capitalists [United States], Michigan Venture Capital Association [United States], Taiwan Venture Capital Association and Hawaii Venture Capital Association [United States]) and in biotechnology (Western Association of Venture Capitalists [United States]). As for the Community Development Venture Capital Alliance, it is more concerned with social development.

4.2 Professional events

World-wide, 84 conferences, symposia, fora or other events of this type have been found on the Internet. The appended computer file (tab – Conferences) presents these events as well as the following information on each one:

• official name of the event;
• annual frequency;
• main subjects dealt with in the last two or three years;
• number of years that the organization responsible has been in existence (when available);
• information on the responsible body including its name, the name of the contact person, the organization's country of origin and its Internet address; and
• additional comments that are relevant to our study have been added, on occasion.

In several cases, the Web sites do not keep information on conferences of previous years. This explains why some information is missing. When the information was available, limiting ourselves to the last 2-3 years provided a general idea of the industry's recent interests.

Table 5 below presents the distribution of these events by continent.

Table 5: Geographic Distribution of Main Professional Events on Venture Capital Held Recently

Continents	Number of Events
Africa	1
America	56
Canada	9
United States	47
Asia	6
Europe	19
Australia/Oceania	2
Total	84

It is no surprise that, once again, the United States is in front: 47 of the 84 events that were inventoried took place in America.

Some of these events are relatively recent. Russia is a case in point, and the recent economic changes there are certainly part of the reason. On the other hand, certain events have been held for several years. Among them, the Canadian Venture Capital Association has existed for 28 years and the Colorado Venture Capital Association and The European Private Equity & Venture Capital Association have existed for 20 years.

The subjects dealt with at these events are varied and sometimes specific to the country, state or the region to which the responsible body belongs. The following subjects were identified for the year 2002:

• the operation of venture capital financing (supply, investment criteria, sources of financing) and the advantages it provides;
• the role of venture capital, exit strategies, opportunities for investment, formal and informal venture capital and strategic alliances;
• trends and the evolution of the national and international venture capital industries;
• the financing of businesses and, more specifically, start-ups, rapid-growth businesses or innovative ones;
• the development of the industry in certain specific sectors (see Table 6);
• the creation of value (Australia) and the value-added of venture capital (Europe).

When they were available, we identified conference themes of the two previous years to see if there were new trends. This information reveals no significant trends. Per year and over the last three years, "financing aspects" is the subject that crops up most often at these events. The second most-discussed subject is the advantages and features of venture capital financing itself. This is not surprising, as the primary objective of these events is to provide information on the industry.

These events could also be grouped according to two main objectives. The first is to inform and to create a place for the exchange of information and the sharing of experiences. The second main objective is to bring together entrepreneurs in search of financing and present their projects to moneylenders willing to finance business opportunities. We have noted the existence of such meetings, especially in the United States and Europe, but on a much smaller scale in Canada and in Asia.

The industrial sectors that were the subject of specific discussions at these events in the last two or three years are varied. Table 6 presents the primary sectors divided into four regions. There is a focus, of course, on the industry's interest in the health sciences and biotechnology sectors, as well the media sector. That does not preclude interventions in other industrial sectors where the investments sought will have to show a strong potential for innovation or growth. The year 2001 was especially associated with venture capital financing in the technology sector.

Table 6: Main sectors that were the subject of conferences in the last two or three years (by region chosen)

Region	Sectors
Canada	Biotechnology and health sciences, communication, new economy
United States	Media (including Internet and telecommunications), pharmacy, biotechnology, technological and innovative companies, fast-growing technological businesses
Asia	High-technology, biotechnology
Europe	Innovative technology, biotechnology, energy

The inventory of events and professional bodies underscores once again the major accent placed on supply: description, statistics and features, whereas the needs of SME are dealt with to a lesser extent. Certain events, however, provide a balance between supply and demand by offering entrepreneurs the possibility of presenting their projects to potential moneylenders. It would be interesting to examine this aspect in greater depth by looking at how entrepreneurs go about presenting their projects, what knowledge they have of moneylenders' requirements and what factors lead moneylenders to help finance the projects presented.