Fundamentals of Venture Capital Financing and Spatial Proximity

Abstract

The term venture capital (VC) is not consistently used in the literature. Many European authors use the terms venture capital and private equity (PE) synonymously, while most US authors use PE as a generic term and VC and PE in a narrow sense as subcategories. Since the US definition is also more and more used in the literature as well as by practitioners in Europe, it is also used within this thesis. Hence, VC and PE in a narrow sense are defined as subcategories of PE in a broad sense which refers to the provision of equity or mezzanine capital to companies that are not quoted on a stock market (Figure 2.1). If not stated otherwise, PE refers to PE in a narrow sense within this thesis.