Wednesday, June 15, 2011

Social Impact of Venture Capital Investment


The Venture Capital industry drives job creation and economic growth by helping entrepreneurs turn innovative ideas and scientific advances into products and services that change the way we live today. Venture capitalists do this by providing the funding and guidance – and by assuming the risks necessary to build high-growth companies capable of bringing these innovations to the marketplace.

Venture Capital is a driving force to our nation’s economy and a driving force for technology. Over the past twenty years, Silicon Valley, a home to many of the world's largest technology corporations, has produced some of the top technology companies in the world.  Some of these companies include Google, Genetech, Sun Microsystems, Intel and Amazon to name a few.  

The continuing growth of information technology industry as well as the software industry was fueled by the emergence of VC industry. Numerous studies have shown that small businesses and entrepreneurism are vital to the health of our nation's economy. In fact, over the last decade, these types of ventures accounted for 70% of economic growth, 75% of new jobs, and represent 99% of all employers.  There are currently 12.1 million jobs at venture backed companies, making up 11% of jobs in the private sector. 

Key Facts:

  • Venture-backed companies out performed the overall economy in terms of job creation and economic growth.
  •  Venture capital industry continues to grow more new industries virtually from scratch.
  • The impact of venture capital continues to grow as regional VC hubs begin to emerge in areas across the country. 

The availability of venture capital exploded after the successful $1.3 billion Initial Public Offering (IPO) of Apple Computer in December of 1980. As venture capitalists continue to support these companies, entrepreneurs have the opportunity to be profitable and create long-term sustainability. With the rising unemployment rate in the United States economy and increasing globalization, VC will play a vital role in the economic recovery of the United States.

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