The impact of concentration among venture capitalists: revisiting the determinants of venture capital

Abstract

This article analyzes the impact of the level of concentration among Venture Capitalists (VCs) on the supply of venture capital (VC), through the reduced form model for the equilibrium amount of VC (using a simultaneous equation model on aggregated data from 15 European countries). It is shown that the level of concentration among VCs has a positive effect on VC supply, so creating conditions to increase the level of concentration can stimulate VC supply. The findings reveal the importance of unemployment and personal income rate on VC demand and the positive impact of stock market capitalization on VC supply.