Venture capital waning force in entrepreneurship, study finds - Jacksonville Business Journal:

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Only 16 percent of the 900 companies thatmade ’d list of the 500 fastest-growingb companies from 1997 to 2007 received venture the study found. Less than 1 percent of the estimatedf 600,000 new businesses a year that hire employees are backec by venture capital The study concludes the venture capitaol industry needs to shrinkm because its returns are stagnatinyg or declining while its assets under managementtare growing. Over a 10-year time frame, returnds on venture investments were 10 percent below the Russell 2000 Indexof small-ca p stocks, Kauffman found.
“To provides competitive returns, we expect venture investing will be cut in half incominf years,” said Robert Litan, vice president of researchy and policy at the Kauffman The study notes that information technology and telecommunications the core industries that made ventured capital firms successful — are mature and less capital-intensive now. Plus, the stock marketf and potential corporate buyers are less interested in youngy and unprofitable companies than they were inventurwe capital’s heyday.
“Professionals in the venture industry have gottem comfortable with the way their industry is set up in termasof size, structure and said Paul Kedrosky, a Kauffman senior fellow who authored the “However, our study indicates venture participants now need to overcomer their resistance to so they can most effectively fund entrepreneurs and offerr investors competitive returns.” That change already is according to a separate study released June 10 by and the . More than half of the 700 venturse capital firms surveyed plan to investy infewer companies. For more information, see www.kauffman.ort or www.nvca.
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