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Chapter 8. Building to Flip > Venture Capital

Venture Capital

As technology has continued to progress and economies to grow, there have been ever-larger demands for capital to fund innovation and ever-increasing sophistication of both technology and business. The result is that a new financial institution has arisen to specialize in providing capital and business expertise to early-stage technology companies. This is the venture capital fund. The public purpose of the venture fund, like that of other financial intermediaries involved with innovation, is to facilitate the introduction of new technologies and applications to the marketplace so that the economy may benefit and living standards be improved.

Because venture investing is about commerce as well as technology, being successful as a venture capitalist also meant “knowing how to play rough with entrepreneurs—playing on their inexperience and emotions, playing founders against each other, negotiating tough prices and generous ownership stakes that in hindsight infuriated the entrepreneurs.”[39]


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