The Effects of Venture Capital Constriction
Economic shifts can produce a constriction in the flow of venture capital and that is generally bad news for the technology and start-up arena. While innovation may continue, consumers may not benefit. Venture capitalists who invest in start-up companies on behalf of themselves, wealthy individuals and institutions, can become skittish about placing faith in start-ups. Instead, they opt for their comfort zone, investing in businesses they already know or companies with proven track records. The result is a slowing in the evolution and marketing of technological advances. Many experts, however, maintain that even when venture capital investment slows, technological advances continue through other avenues -- in people's garages, homemade labs, government research programs and university experiments. But, although the innovations are still there, they don't make it to market and the consumer as quickly as they would with the venture capital needed to capitalize:· Production · Refinement · Regulatory approval · Start-up costs | · Marketing · Sales · Distribution |