p> The assessment of the effects of venture capital on economic growth in the United States is made within the context of economic theory. Growth modelsùendogenous and neoclassicalùprovide the theoretical focus for this assessment.
A full assessment of the effects of venture capital on economic growth in the United States within the context of growth models would require the performance of extensive econometric analyses. Econometric analyses were not performed as a part of this assessment. Rather, the quantitative data relative to the effects of venture capital-backed firms on economic growth in the United States are discussed within the context of growth models to draw conclusions about the relationship between the two variables. Because econometric analyses were not performed, these conclusions are conjectural in nature, as opposed to being objective determinations.
The Performance of Venture Capital-Backed Firms in the United States Economy
In an earlier era (almost 20 years ago) in the United States, it was found that more than enough venture capital was available for some areas of entrepreneurial endeavor. It was reported in April of 1983 that "at least $5.5 billion in new venture capital over the past five years" had been provided to entrepreneurs, which enabled the startup of new businesses and the introduction of new products at rates "far exceeding that of even the venture boom of the mid-1960s, when the minicomputer and semiconductor industries took off" ("The New Entrepreneurs," 1983, p. 78).
It was reported, also, however, that most of this new venture capital was available only to those entrepreneurs involved in the glamour industries of the early-1980sùthe so-called "high-tech industries" of the day ("The New Entrepreneurs," 1983, p. 78). The raising of venture capital for entrepreneurs interested in technological innovations in older industries or in industries not yet born remained a difficult task a...