Title: Empirical evidence on a supply-driven Venture Capital market in the USA

Authors: Avi Messica, Tamir Agmon

Addresses: Technology Management Department, Holon Institute of Technology, 52 Golomb St., P.O.B 305, Holon 58102, Israel. ' The College of Management, School of Business Administration, 7 Itzhak Rabin Boulevard, P.O.B 9017, Rishon Le-Zion 75190, Israel

Abstract: This research focused on the US venture capital (VC) industry over the period of 1980 to 2006. We found that supply and demand shifts occurred in the US VC during that period. Moreover, the US VC industry has gone under fundamental transformation in the early 1990s when pension funds started to invest in the sector. As a result, the US VC industry has transformed into a supply-driven market. We estimate that the VC industry is still inflated and predict degraded future returns if the current trend of institutional investors to further increase their allocation for venture capital investments continues.

Keywords: venture capital; pension funds; supply and demand; temporal analysis; USA; United States; investment.

DOI: 10.1504/IJTE.2007.016956

International Journal of Technoentrepreneurship, 2007 Vol.1 No.2, pp.207 - 219

Published online: 01 Feb 2008 *

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