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Executive forum : the scale-up gap : and how to address it

Rudy Aernoudt (UGent)
(2017) VENTURE CAPITAL. 19(4). p.361-372
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Abstract
There is academic unanimity concerning the fact that the equity market does not function at the lower end. Risks are too high and not rewarded by sufficient return. Hence, companies looking for small amounts of money in the seed or early stage phase do not find it. This paper argues that second- and third-round financing, even though less risky, has also become problematic, especially in Europe. While start-ups are confronted with the small equity gap at seed and early stage, scale-ups are also confronted with an equity gap at later stages. A holistic policy, not focused on a specific stage of investment, should therefore replace a targeted one. The paper shows that in this context a government-backed debt-financing instrument delivers better value for public money than a fund-of-funds approach and increases the efficiency of the latter.
Keywords
scale-up gap, reverse pari-passu, government-backed debt financing, fund-of-funds approach, HIGH-TECH, CAPITAL-MARKET, SMALL FIRMS, VENTURE, GROWTH, EQUITY, POLICY

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MLA
Aernoudt, Rudy. “Executive Forum : The Scale-up Gap : And How to Address It.” VENTURE CAPITAL, vol. 19, no. 4, Informa UK Limited, 2017, pp. 361–72, doi:10.1080/13691066.2017.1348724.
APA
Aernoudt, R. (2017). Executive forum : the scale-up gap : and how to address it. VENTURE CAPITAL. Informa UK Limited. https://doi.org/10.1080/13691066.2017.1348724
Chicago author-date
Aernoudt, Rudy. 2017. “Executive Forum : The Scale-up Gap : And How to Address It.” VENTURE CAPITAL. Informa UK Limited. https://doi.org/10.1080/13691066.2017.1348724.
Chicago author-date (all authors)
Aernoudt, Rudy. 2017. “Executive Forum : The Scale-up Gap : And How to Address It.” VENTURE CAPITAL. Informa UK Limited. doi:10.1080/13691066.2017.1348724.
Vancouver
1.
Aernoudt R. Executive forum : the scale-up gap : and how to address it. Vol. 19, VENTURE CAPITAL. Informa UK Limited; 2017. p. 361–72.
IEEE
[1]
R. Aernoudt, “Executive forum : the scale-up gap : and how to address it,” VENTURE CAPITAL, vol. 19, no. 4. Informa UK Limited, pp. 361–372, 2017.
@misc{8528693,
  abstract     = {{There is academic unanimity concerning the fact that the equity market does not function at the lower end. Risks are too high and not rewarded by sufficient return. Hence, companies looking for small amounts of money in the seed or early stage phase do not find it. This paper argues that second- and third-round financing, even though less risky, has also become problematic, especially in Europe. While start-ups are confronted with the small equity gap at seed and early stage, scale-ups are also confronted with an equity gap at later stages.
A holistic policy, not focused on a specific stage of investment, should therefore replace a targeted one. The paper shows that in this context
a government-backed debt-financing instrument delivers better value
for public money than a fund-of-funds approach and increases the
efficiency of the latter.}},
  author       = {{Aernoudt, Rudy}},
  issn         = {{1369-1066}},
  keywords     = {{scale-up gap,reverse pari-passu,government-backed debt financing,fund-of-funds approach,HIGH-TECH,CAPITAL-MARKET,SMALL FIRMS,VENTURE,GROWTH,EQUITY,POLICY}},
  language     = {{eng}},
  number       = {{4}},
  pages        = {{361--372}},
  publisher    = {{Informa UK Limited}},
  series       = {{VENTURE CAPITAL}},
  title        = {{Executive forum : the scale-up gap : and how to address it}},
  url          = {{http://dx.doi.org/10.1080/13691066.2017.1348724}},
  volume       = {{19}},
  year         = {{2017}},
}

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