INTRODUCTION The increasing pressure being exerted upon the American economy by foreign competition and innovation has led to a concern with economic redevelopment and renewal of the economy. An important vehicle for such redevelopment lies with the small firm. Small firm formation is dependent upon the availability of speculative capital partially provided by the organized venture capital industry (Davis 1986). As Leinbach and Amrhein (1987) persuasively argue venture capital can help in small firm formation with the attendant benefits (Storey 1980) of job creation and the spawning of innovation. Florida and Kenney (1988b) maintain that venture capital is an important element in high-technology entrepreneurship.