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AbstractManuscript TypeEmpiricalResearch Question/IssueWe first study how cross‐country differences in shareholder protection against self‐dealing and personal bankruptcy laws affect the financing of new technology‐based firms (NTBFs). Second, we study how venture capital (VC) investors – as expert monitors and initiators of "good" governance practices in firms – moderate aforementioned relationships.Research Findings/InsightsUsing a unique longitudinal dataset of 6,813 NTBFs from six European countries, we find that better shareholder protection rights increase the probability of raising external equity financing and allow firms to raise larger amounts of equity financing. Less forgiving personal bankruptcy laws decrease the probability of raising debt financing and limit the amount of debt financing that is raised. VC ownership strengthens the aforementioned relationships.Theoretical/Academic ImplicationsThis study is one of the first to provide evidence on the relationship between national legal systems and the financing of private NTBFs. We further address a recurring call for more research on the interaction between country‐level legal systems and firm‐level corporate governance. In particular, we show that expert monitors, such as VC investors, strengthen the relationship between national legal systems and NTBF's access to external financing.Practitioner/Policy ImplicationsPolicy makers often focus on increasing the supply of VC financing as a panacea for external financing constraints experienced by NTBFs. This study shows that VC ownership is particularly effective at increasing firms' access to external financing in countries with strong investor protection rights and entrepreneur‐friendly personal bankruptcy laws.

International audience ; We evaluate whether government intervention through the subsidization of business angel networks enhances regional economic growth. We show that, firstly, BANs reduce the information and financing problems entrepreneurial companies face. Secondly, these companies contribute to economic development and growth. Thirdly, there are positive indicators of future potential, such as an upward evolution in value creation and ability to raise follow-on financing. Finally, the programme has many positive indirect effects. This leads us to tentatively conclude that public BAN support is warranted. However, to make this conclusion more robust requires a longer-term evaluation.

We evaluate whether government intervention through the subsidization of business angel networks enhances regional economic growth. We show that, firstly, BANs reduce the information and financing problems entrepreneurial companies face. Secondly, these companies contribute to economic development and growth. Thirdly, there are positive indicators of future potential, such as an upward evolution in value creation and ability to raise follow-on financing. Finally, the programme has many positive indirect effects. This leads us to tentatively conclude that public BAN support is warranted. However, to make this conclusion more robust requires a longer-term evaluation.