This study evaluates the policy objectives and efficacy of government venture capital funds (GVCs) on the performance of invested entrepreneurial ventures. Analyzing data from China on GVCs, private venture capital funds (PVCs), and foreign venture capital funds (FVCs), it reveals that GVC-supported firms surpass those backed solely by domestic PVCs in R&D investment, return on assets (ROA), Tobin's Q, and corporate social responsibility metrics. Acting as government stewards, GVCs effectively fulfill policy goals. Moreover, GVC-backed ventures attract more venture capital following their lead and achieve higher one-day returns at IPOs compared to firms backed solely by private VC funds. •Entrepreneurial firms backed by GVCs will increase R&Ds investments more than that of the non-VC-backed firms while the effect of GVCs on R&Ds is stronger than those firms backed by PVCs.•Entrepreneurial firms backed by GVCs will increase ROA and Tobin's Q more than the non-VC-backed firms and the firms backed by PVCs.•Entrepreneurial firms backed by GVCs will increase their CSR more than the non-VC-backed firms and the effect of GVCs on CSR is stronger than those firms backed by PVCs or FVCs.•Firms backed by GVCs attract more other VC funds to invest in them and generate a larger first-day return at the initial trading day than that of the firms backed by FVCs and PVCs.