Investigating the Lack of Success in Obtaining Venture Capital during the Creation of the Firm

摘要

This study identifies the factors from the demand point of view that are responsible for the failure to obtain venture capital during the pre start-up phase of innovative firms. The empirical data comes from a survey administered to 63 Portuguese nascent entrepreneurs who tried to obtain venture capital and were not successful. The main reasons cited for not obtaining venture financing were: 1) small size of the venture capital market in Portugal; 2) limited public policies to support venture capital participation; 3) lack of interest of the venture capitalists in pre start-up phase investments; 4) unwillingness of venture capitalists to provide small amounts of capital. The conclusions of this paper serve as a wake-up call to the policy makers in Portugal to be more aggressive in relation to the public policies giving support to venture capital. It also contains a message for the venture capitalists to pay greater attention to the investment in the pre start-up phase and not to underestimate the financing requests for lower amounts.