Venture capital spurs growth at the critical early stages of growing companies' development. Moreover, venture capitalists don't just throw their money at start-up companies hoping to get lucky and pick a winner. They become involved as board members and management advisers, suggesting strategic partnerships and helping to refine business plans. In 1999, it was disbursed to some 4,000 companies, eight times as many as in 1980.
Venture capital is a story of Silicon Valley and everyone else.
The San Francisco metro area receives over twice as much venture capital as a share of its economy as does Seattle, the next-highest metro. This is clearly because the area remains the technological innovation capital of the globe, with a strong presence in a host of high-tech sectors, including biotech, Internet, telecom, computers, and devices. The presence of strong university engineering and science programs, in places like Silicon Valley, Austin, and Raleigh, is also associated with venture capital investments.