Finance:Venture business

Venture company is angel-capital-ready firm which has the promise to create significant economic wealth for a region, state or country including entrepreneurial wealth and jobs. Venture companies are often small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth (in terms of number of employees, annual revenue, or both). Venture capital firms or funds invest in these venture companies in exchange for equity, or an ownership stake in them. Venture capitalists take on the risk of financing these risky firms in the hopes that some of the firms they support will become successful.

Venture development organizations typically are organized as not-for-profit corporations. They may manage for profit or not-for-profit seed funds. Their sources of financial support are corporations, local and state governments, universities, research institutions, foundations, and individuals.

Why is Venture Development Important?

Venture-backed firms now account for a significant portion of current jobs in the U.S. economy.

• Employees from venture-backed companies represent 9 percent of all private sector U.S. employment and the revenues from venture-backed companies represent 17.6 percent of U.S. GDP
• U.S. companies that received venture capital resources from 1970-2006 now account for 10.4 million jobs and $2.3 trillion in revenue in the U.S. economy
• Venture-backed companies also grow much faster (revenues and employees) versus non venture-backed companies (11.8 percent versus 6.5 percent in revenues and 3.6 percent versus 1.4 percent in employment between 2003 and 2006)

As a result of these existing and on-going trends, the economy of communities that do not have a significant set of venture-backed firms will suffer on a competitive peer basis when evaluating economics such as job growth and per-capita income.