Oh boy. French Minister Eric Besson just announced that the French government will start a VC fund with $575 million euros, to invest directly in internet startups.
Your writer generally tries to boost France as a startup hub and with good reason, but this is just silly.
The evidence that governments do a terrible job at picking winners and losers in industry is overwhelming, and particularly in high technology businesses.
There is a case for governments investing in venture capital as limited partners to jump-start an innovation ecosystem. It was a tremendous success for Israel (and failed everywhere else, but at least there's a case for the benefit of the doubt). The government already does this all the time in Europe, by the way. Investors we speak to tell us that many VC firms in France and Europe are "zombies" who couldn't raise money from private sector institutional investors but get money from government funds (either France or the EU) and stick around.
To read the full, original article click on this link: MORE DUMB MONEY: French Government Starts $575 Million VC Fund
Author:Pascal-Emmanuel Gobry
