The survival of venture capital backed companies : an analysis of the French case

Sophie Pommet (1)

1 GREDEG - Groupe de Recherche en Droit, Economie et Gestion

We analyze the impact of venture capital on firm performance ; more precisely, we investigate whether venture capital adds value to innovative French companies in terms of increasing their survival time. To this end, we use a hand-collected data set based on a sample of 139 French companies that went public at the "Nouveau Marché" between 1996 and 2002 to compare the survival rates of venture capital backed and non-venture capital backed companies. We develop two sets of econometric models to evaluate the factors that a ffect the fate of French initial public offerings. First, we estimate a discrete time duration model to explain the probability of exit. Second, we apply a competing risk model to account for heterogeneity in rm exit (liquidation versus merger/acquisition). Contrary to common wisdom, the estimates show that venture capital backed companies have a lower survival rate than non-venture capital backed companies and have a higher probability of being liquidated than other firms. Our results are comparable to those ob- tained in previous studies on Germany and Belgium which show that receiving venture capital does not improve firm survival.

Mots clés: venture capital; survival; innovation; France

Domaines: Economies et finances

Sophie Pommet. The survival of venture capital backed companies : an analysis of the French case. 2011. ⟨halshs-00720927⟩