US State Venture Capital Programs
03/01/2006
Author:
Daniel Sandler
University of Western Ontario
London, Canada
www.uwo.ca | Categories:
Best Practices
Economic Development
Regional Programs
Seed Capital
SME Finance
Venture Capital |
Article:State Venture Capital
By Daniel Sandler
January 2006
Daniel Sandler, Professor at the Faculty of Law, University of Western Ontario, Canada and a senior research fellow on Taxation, Law and Policy Research authored this article for use at a symposium to be held in May to examine best practices for the states in establishing and operating state sponsored venture capital programs. The article has been published in advance because United States legislators and other parties may find the information contained in the article of value in considering the options available.
INTRODUCTION
The US Venture Capital industry is not a national phenomenon. It is highly localized, concentrated primarily on the northeast and southwest coasts. Recent statistics indicate that while the geographic dispersion of venture capital fundraising and investment has increased, it remains concentrated, with many states raising little capital and receiving little investment. Due to the geographic concentration of the formal venture capital industry, a number of states—particularly in the nation’s mid-section—have introduced a variety of programs in order to promote a local venture capital industry.