Venture Impact takes a look at the economic impact of venture backed companies. This study looks at the contribution venture backed companies have had on overall job creation, revenue creation and innovation over the last 30 years.

Executive Summary

This report provides an overview of the key findings contained in the Global Insight study, Venture Impact: The Economic Importance of Venture Capital Backed Companies to the U.S. Economy, commissioned by the National Venture Capital Association (NVCA). The statistics presented here are based on a database of over 23,500 venture capital backed companies. The data demonstrates the enormous contribution of venture capital backed companies to U.S. jobs, sales, economic growth, and technological progress. The nation’s venture capital industry plays a paramount role in nourishing the U.S. economy by bringing innovative concepts and business models to life.

Boosts America’s Economic Strength by Creating Jobs and Revenue

Employment and sales data conclusively show the importance of venture capital backed companies to the U.S. economy. Venture capital financed companies are found in all sectors of the American economy. Innovative venture capital backed businesses such as Genentech, Medtronic, Microsoft, Home Depot, and Intel are among the prominent and diverse American companies that received venture capital early in their development.

Together, the nation’s venture capital backed companies employed over 10.4 million American workers in high-quality jobs and generated $2.3 trillion in revenue in 2006. The total revenue of venture capital financed companies comprised 17.6 percent of the nation’s gross domestic product (GDP) and 9.1 percent of U.S. private sector employment in 2006.

The payoffs for venture capital investments are enormous. Similar to recent years, $26 billion was invested in 2006. This represented just 0.2 percent of U.S. GDP. Revenue generated by the universe of venture backed companies in 2006 corresponded to 17.6 percent of GDP.

Outperforms Other Companies

Venture capital backed companies outperformed their non-ventured counterparts in job creation and revenue growth. Employment in venture backed companies jumped by 3.6 percent, while national employment grew by just 1.4 percent, between 2003 and 2006. At the same time, venture capital backed company sales grew by more than 11.8 percent, compared to an overall rise in U.S. company sales of 6.5 percent during the same period.

Sustains Employment and Revenue Across Major U.S. Industry Sectors The nation’s innovative and cutting-edge venture capital backed companies sustain jobs and revenue across diverse industry sectors from computers and peripherals, retailing/distribution, semiconductors, software, and telecommunications to biotechnology, financial services, healthcare services, and medical devices. ...

Download Venture Impact: The Economic Importance of Venture Capital Backed Companies to the U.S. Economy

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Venture Impact:
The Economic Importance of Venture Capital Backed Companies to the U.S. Economy
Fourth Edition

ISBN: 0-9785015-4-3
Copyright 2007 by the National Venture Capital Association.

TABLE OF CONTENTS
Executive Summary 4
Venture Capital 101 8
Venture Capital Backed Companies Boost America’s Economic Strength 12
Venture Capital Backed Companies Create Jobs 15
Venture Capital Backed Companies Drive Sales 17
Venture Capital Supports Employment Across the Country 19
Venture Capital Supports Sales Across the Country 21
Methodology 23

ABOUT GLOBAL INSIGHT

Global Insight is a privately held company formed from the two most respected economic and financial information companies in the world, Data Resources, Inc. (DRI) and Wharton Econometric Forecasting Associates (WEFA).

With the integration of the World Markets Research Centre (WMRC), Global Insight also provides the world’s first same-day analysis and risk assessment service covering over 200 countries and four industries, providing insightful analysis of market conditions and key events around the world. With over 40 years of experience behind it, Global Insight provides the most comprehensive economic and financial coverage of countries, regions, industries, and markets available, using a unique combination of expertise, models, data, and software within a common analytical framework to support planning and decision making.

Global Insight, Inc. is recognized as the most consistently accurate forecasting company in the world. Global Insight has over 3,800 clients in industry, finance, and government with revenues in excess of $80 million, 600 employees, and 23 offices in 13 countries covering North and South America, Europe, Africa, the Middle East, and Asia.

Content First, LLC:

This publication was prepared from the Global Insight study by Content First, LLC, a full-service public policy research services firm in Washington, DC that utilizes a unique process of melding solid research and analysis with presentation and communication.

Content First brings advocacy data, industry statistics, and policy research to life for trade associations, businesses, law firms, consulting firms, and the public affairs community.

Content First produces economic and policy reports for prominent trade associations, including the U.S. Chamber of Commerce, the Organization for International Investment, the Representative of German Industry and Trade, and the Transatlantic Business Dialogue.

In addition, Content First co-authored the NVCA report American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness.

For more information about Content First, visit www.contentfirst.com.

National Venture Capital Association:

The National Venture Capital Association (NVCA) represents approximately 480 venture capital and private equity firms. NVCA’s mission is to foster greater understanding of the importance of venture capital to the U.S. economy and support entrepreneurial activity and innovation.

NVCA represents the public policy interests of the venture capital community, strives to maintain high professional standards, provides reliable industry data, sponsors professional development, and facilitates interaction among its members.

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