Cambridge Centre for Business Research Survey of Venture Capital Firms in Western Europe, 2001

This project focused on the funding of small and medium-sized enterprises (SMEs) in different regions in Europe against the background of increasing integration of Europe’s financial space, and the specific context of dramatic transformation of regional and local banking systems and the emergence of a venture capital market. <br> <br> To the extent that a bank funding gap is emerging amongst SMEs, other sources of finance are likely to be of growing importance. One of these is the emerging European venture capital market, and this survey examined the nature, extent and role of this new circuit of finance for the SME sector. At present the venture capital market is unevenly developed, being much more advanced in the UK than in other member states. The research endeavoured to identify the reasons for this uneven development, and to assess whether the emergence of, access to, and scope for venture capital funding of SMEs is likely to benefit some local economies more than others. The evidence for the UK seems to suggest so far that the development of a geographically biased system of finance provision for SMEs in which both bank finance and venture capital favour certain (typically successful) regions over other (typically less successful) regions.<br>