Abstract
Using the dataset of 315 SMEs, which received venture capital financing during the period 1998-2007, and several carefully constructed control samples this study sheds new light on the implications of investor type on efficiency patterns of Belgian entrepreneurial SMEs during first 3 years after the initial capital injection. There are three main findings. First, we observe increases in efficiency of venture capital-backed firms. Firms financed by private funds show higher efficiency levels and changes relative to their publicly-backed peers. Second, regression analyses indicate that for venture capital-backed firms public backing translates into statistically and economically significant reductions of efficiency. Finally, venture capital in general does not imply better efficiency patterns of the portfolio firms in comparison to their non-venture-backed peers. At the very least, better efficiency with respect to the control group might be observed for the privately-backed SMEs but this result is not stable.