This seminar examines recent and likely future developments in the venture capital industry, with an emphasis on the relationship between venture capital investments and local economic development. Particular attention is given to the evolution of venture investment activity in Silicon Valley. The policy steps open to subnational - and particularly local - bodies in order to expand venture investment will be assessed.
Many surveys show that venture-funded companies play a disproportionate role in job creation. Increased venture capital investment in poorer communities would be a welcome contribution to local development and employment objectives. However, market failures may restrain the supply of small amounts of equity, especially for start-ups and new-technology-based firms. For venture capitalists the costs of assessing and managing investments are almost invariant with respect to the size of the deal. Furthermore, there may be superior risk-return opportunities in investments in management buy-outs and business development, rather than enterprise creation. Scale issues are also important because small venture capital funds which supply the bulk of venture capital for start-ups are limited in the degree to which they can diversify their investment portfolios. They thus incur relatively greater risk than larger funds. Demand factors can also constrain firms in adopting optimal financial structures. A greater willingness on the part of entrepreneurs to accept external equity demand for which might be increased through education could facilitate growth and survival for many small firms. The seminar will also consider the role of policy in supporting business angel networks. Networks of business angels aim to match informal investors with ventures seeking small amounts of equity finance. Owing to its informal nature, the volume of equity provided by business angels is uncertain. However, in the United States investment by business angels is thought to be at least twice the size of the formal venture capital pool, with some estimates ranging significantly higher. Business angels generally invest in the early stages of enterprise start-up, often in firms not yet ready for formal venture capital. Such investors can bring significant knowledge and experience to the investee firm. Furthermore, and of importance for territorial development, business angels are geographically dispersed and invest locally.
It is also often noted that formal venture capitalists usually invest within a relatively small geographic radius, owing to the need for frequent interaction with investees. Whether this observation implies a role for policy at the local level will be examined. Attention will also be given to so-called social venture capital, that is, policies and programmes aimed at encouraging venture investment in localities or particular types of firm, in order to yield specific social benefits. This event will bring together practitioners, academics and policymakers from across Europe and the United States.
Venture Capital and Local Development 19 June, 15, Quai Anatole France, Paris 7th
Caisse des Dépôts et Consignations/ Berkely Roundtable on the International Economy/(BRIE) OECD-Local Economic and Employment Development (LEED) Programme
Morning
08:30 Continental Breakfast
9: 00:Opening
Speakers:M. Albert Ollivier Directeur des PME et de l'emploi Caisse des Dépôts et consignations.
Carlos Flores Chair, LEED Programme Head of Advisors Team to the President of Mexico
9:20-10:00:The Local Dimension of Venture Capital
Panel Chair:Sergio Arzeni Head, Local Economic and Employment Development (LEED) Programme, OECD.
Speakers:Professor Stephen S. Cohen Co-Director BRIE; Professor Martin Kenney, U.C. Davis, BRIE
10:00-10:40 BREAK
10:40-1:00: Venture as Practice I: Evolution of the Silicon Valley Model
Panel Chair:Prof. Jerome Engel, Executive Director, Lester Center for Entrepreneurship, ,Haas School of Business, University of Berkeley
Speakers:Joe Schoendorf, Partner, Accel Partners, Palo Alto Federico Rampini, Journalist, La Republica Rafiq Dossani, Stanford : Indian Venture Capital and its connections to Silicon Valley Prof. John Zysman, Co-director, BRIE Dr. Juha.Yla-Jaaski, Head, Strategy, NOKIA. On Corporate Venturing
LUNCH 13:00-14:30. Lunch speaker: Marc Abélès, author of "Les Nouveaux Riches : Un Ethnologue dans la Silicon Valley"
Afternoon
14:30 - 15:00: Business Angels, Local Development and Public Policy
Chair:Alistair Nolan, OECD/LEED Programme
Speaker:Professor Colin Mason University of Strathclyde
Curt Winnen, Munich Network
Mme Paulette Pommier, Datar, French Delegate to the LEED Programme
15:00 - 16:30:Venture as Practice II: Alternative Models
Panel Chair:M. Didier Havette Directeur du Programme PME Caisse des Dépôts et Consignations
Speakers:Professor Gordon Murray, London Business School
Ari Hyytinen, The Finnish Cluster, ETLA, Finland
Jean-François Rocchi, PDG, Sofirem
Philippe Albert, (CERAM : Sophia Antipolis)
BREAK 16:30-16: 50
16:50- 18-15:"Where is Venture Going ?" A Roundtable Conversation
Panel Chair:Jean-Yves Rossi, Chair, OECD/LEED Forum on Entrepreneurship
Participants:François Hurel, Délégué général APCE, Agence Pour la Création d'Entreprises Prof. Stephen Cohen, BRIE Dr. Ossama Hassanein, Managing Partner, Newbury Ventures, France Carlo Borgomeo, Italian Delegate to the LEED Programme
Closing Remarks:
Mr.Bernard Hugonnier Head, Territorial Development Service, OECD.
