---
title: "Coaching Small Biotech Companies into Success: The Value-adding Function of VC"
authors:
  - name: "Luukkonen, Terttu"
  - name: "Maunula, Mari"
date_published: "2006-08-23"
series: "Keskusteluaiheita nro"
series_number: "1032"
jel_codes:
  - "O16"
  - "G24"
  - "O38"
  - "L65"
language: "en"
publisher: "ETLA Economic Research"
pdf_url: "https://www.etla.fi/wp-content/uploads/2012/09/dp1032.pdf"
keywords:
  - "venture capital"
  - "biotechnology"
identifier: "https://www.etla.fi/julkaisut/id/Keskusteluaiheita-nro-1032"
---

# Coaching Small Biotech Companies into Success: The Value-adding Function of VC

**Published:** 2006-08-23  
**Categories:** Julkaisut  
**Tags:** bioteknologia, Keskusteluaiheita  
**URL:** https://www.etla.fi/julkaisut/dp1032-fi/

The paper reports an empirical study on the non-financial value-added provided by Venture Capital investors to their investee firms. This study will use a four-class grouping of the various non-financial value-adding capabilities provided by VC firms, namely, scouting, monitoring, signalling and value-adding services. The study examines biotechnology industry in Finland.
 Finland has a dual system with independent (partially ever-green) VC companies and public or semi-public VC organisations. Additionally, informal VCs are fairly active. Whether the different types of VC organisation aim, are able and indeed do deliver non-financial value-added, in addition to their financial input, is the central focus of this study.
 The paper has an evolutionary perspective on Venture Capital according to which VC promotes a variety of experimentation with new technologies, especially through the foundation of new firms oriented to experimentation and development of new ideas. At the same time, VC industry fulfils a selection function in its role as a financial intermediary.
 The study data have been collected through interviews, conducted at the end of 2005, with the total population of small and medium-sized, VC-backed biotech companies established in Finland since 1986.
 Central findings of the study include an observation that all three VC types did provide value-added in the meaning outlined above. Nevertheless, there were clear differences between them in terms of the overall perceived value-added as well as in their activity profiles. Informal investors were found to have the highest overall value-added and kept closest contacts with their investee firms.

---

## Additional Information

**Key Words:** venture capital, biotechnology

**Kirjoittajat:** Luukkonen, Terttu - Maunula, Mari

**Lataa Pdf:** https://www.etla.fi/wp-content/uploads/2012/09/dp1032.pdf

**Kansikuva:** https://www.etla.fi/wp-content/uploads/2012/09/dp_cover.jpg

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