Tangible and intangible proximities in the access to Venture Capital by Innovative Start-up Companies

We investigate the role of tangible versus intangible forms of proximity in facilitating access to Venture Capital (VC) for Innovative Start-up Companies (ISCs), introducing a novel focus on their relational proximity. Combining insights from entrepreneurship research and economic geography, we develop and test hypotheses on the role of proximities using data on the population of Italian ISCs over the period 2014–2019. Our findings show that tangible (i.e. spatial) proximities influence VC–ISC matching, more in terms of functional rather than geographical proximity. Industrial proximity also plays a role, reducing the binding nature of functional proximity for the matching. While this substitutive effect does not emerge with respect to relational proximity, the latter – captured through a novel measure – appears to exert the strongest influence.