ABSTRACT
Venture capital plays a critical role in technological innovation and economic development. California’s Silicon Valley and Massachusetts’ Route 128 area clearly owe much of their vibrant, rapidly growing economies and their development as high-technology centres to the infusion of significant amounts of venture capital. The successful revitalization of these regions stands in sharp contrast to the stagnation and decline of the older, more traditionally oriented manufacturing regions. Venture capital has played a catalytic role in the formation of new technologies, and indeed entirely new industries. The revolutionary innovations and inventions of numerous venture capital-backed start-ups like Fairchild, Intel, DEC, Apple Computer, Cray Computer, Sun Microsystems, Genentech, and countless others have set in motion tremendous gales of industrial restructuring and economic renewal. Many of these companies would never have got off the ground at all, or attained commercial success so quickly, without the financial backing and managerial expertise of venture capitalists. Three-quarters of all venture investments go to high-technology companies.
