Working Paper CNR-Ircres 02/2019                          
                                          DOWNLOAD (pdf file)


The Start-up Venture Capital Innovation System
Comparison with industrially financed R&D projects system


Angelo Bonomi

CNR-IRCRES, National Research Council, Research Institute on Sustainable Economic Growth, via Real Collegio 30, Moncalieri

corresponding author: This email address is being protected from spambots. You need JavaScript enabled to view it.



This paper concerns a study on the start-up venture capital (SVC) system, now becoming an important structure for generation of new technologies. SVC system may be considered an evolution of R&D projects system financed by industrial capitals. The study considers start-ups companies of technological nature characterized by carrying out not only R&D but also searching business models suitable for the developed technology. Venture capital (VC) owns the more radical aspect of the SVC system, looking for selling the developed technology or business, and refinancing new start-ups instead of exploiting the use of the technology as done by industrial capital financing R&D projects. The SVC system have the objective to reach an exit selling the developed technology or business and obtaining an adequate return of investment (ROI) for the VC. The SVC system operates in a financing and refinancing cycle that may reach an equilibrium when obtained ROI covers costs of both successful and abandoned start-ups and cost and rewards of VC. Should ROI be higher than the equilibrium value it might start an autocatalytic process generating a high number of technologies and ROI. The SVC cycle may be simulated mathematically showing that a selection strategy of financed start-ups based on high potential ROI and team validity gives in practice superior economic results in respect to a selection strategy based on the probability of a successful exit of the start-up. Comparison of SVC system and industrially financed R&D projects shows that the SVC system is superior in the development of radical technologies with suitable business models in respect to industrially financed R&D projects that are limited by pre-existent strategies in firms financing R&D.


Keywords: Start-up, venture capital, R&D, business model.


JEL codes: O14, O32




How to Cite this Article

Bonomi, A. (2019). The Start-up Venture Capital Innovation System. Comparison with industrially financed R&D projects system (CNR-IRCrES Working Paper 2/2019). Moncalieri, TO: Consiglio Nazionale delle Ricerche, Istituto di Ricerca sulla Crescita Economica Sostenibile.




We use cookies to improve our website and your experience when using it. Cookies used for the essential operation of this site have already been set. To find out more about the cookies we use and how to delete them, see our privacy policy.

  I accept cookies from this site.
EU Cookie Directive plugin by