The venture capital market and technological innovation

This paper was stimulated by assertions that technological innovation in the United States by new or small firms is being delayed or altogether stifled by an inadequate supply of capital for such firms. Analysis of available data on the performance and activities of public venture capital sources and information supplied by knowledgeable people in the field provided little support, on strictly economic grounds, for the argument that a major problem exists. The data, however, are extremely thin and inadequate to suport recommendations for major policy changes.