NVCA and BVCS are lobbying groups on behalf of one industry (VC). I don't trust much of anything any lobby group spouts out about its industry which is one of the reasons why I'm working to set up a transatlantic forum of luminaries across the Innovation Spectrum (Entrepreneurs, Angels, VC, Government, Academia, Communities, LPs and Legal).

Vivek- you're right VC funding does not create innovation. You're also right about the propaganda espoused by VC lobby groups. But VC funding has “accelerated innovation” beyond a doubt. Look at the countries where there is a healthy source of VC funding (US, UK, Israel) and there you find numerous examples of these countries being ahead in the innovation of new technologies. Personally, I think the cost of capital of VC funding is too high compared to alternative PE funding but this is generally something beyond the expertise of most CEOs leading emerging companies- they go straight for VC without even looking at the alternatives.

NVCA and BVCS are lobbying groups on behalf of one industry (VC). I don't trust much of anything any lobby group spouts out about its industry which is one of the reasons why I'm working to set up a transatlantic forum of luminaries across the Innovation Spectrum (Entrepreneurs, Angels, VC, Government, Academia, Communities, LPs and Legal).

Vivek- you're right VC funding does not create innovation. You're also right about the propaganda espoused by VC lobby groups. But VC funding has “accelerated innovation” beyond a doubt. Look at the countries where there is a healthy source of VC funding (US, UK, Israel) and there you find numerous examples of these countries being ahead in the innovation of new technologies. Personally, I think the cost of capital of VC funding is too high compared to alternative PE funding but this is generally something beyond the expertise of most CEOs leading emerging companies- they go straight for VC without even looking at the alternatives.

Let me know when you're in Berkeley, CA.

Regards,

Vivek
wadhwa at Duke.edu

NVCA and BVCS are lobbying groups on behalf of one industry (VC). I don't trust much of anything any lobby group spouts out about its industry which is one of the reasons why I'm working to set up a transatlantic forum of luminaries across the Innovation Spectrum (Entrepreneurs, Angels, VC, Government, Academia, Communities, LPs and Legal).

Vivek- you're right VC funding does not create innovation. You're also right about the propaganda espoused by VC lobby groups. But VC funding has “accelerated innovation” beyond a doubt. Look at the countries where there is a healthy source of VC funding (US, UK, Israel) and there you find numerous examples of these countries being ahead in the innovation of new technologies. Personally, I think the cost of capital of VC funding is too high compared to alternative PE funding but this is generally something beyond the expertise of most CEOs leading emerging companies- they go straight for VC without even looking at the alternatives.

Thanks,

Elliott Dahan
elliott(a)thegrowthgroup.com

NVCA stats are produced as part of a lobbying effort, and if they are anything like the British Venture Capital Society over here then the purpose of that effort will be to benefit VCs and then entrepreneurs indirecty. As such I think they contribute positively to the ecosystem. That said I accept your point that in reaching for headline grabbing numbers it is possible they overstate the influence of VCs (please forgive the caution in my words).

Finally, establishing the demonstration of causality you seek is impossible, as I suspect you know. What I can say for sure though is that a number of the successful businesses DFJ Esprit has been invested in say we played an important role in helping them scale the heights.

Rather than taking one of the examples I used and building your case on that, I would like to see you respond to the points I made and the evidence which I presented. Just like I challenged the NVCA to prove causality, I challenge you. How do you know that if VC wasn't available, that Google wouldn't have been able to raise alternative forms of financing?

I stand behind my statement that it isn't the VC's who make innovation happen, it is the entrepreneurs. To fuel economic growth, we need to nurture entrepreneurship. We are not going to make the right policy decisions unless we have our basic facts straight.

I am not trying to be anti-VC or build anti-VC sentiment, but get down to cold, hard facts.

Regards,

Vivek Wadhwa
Duke/Harvard/UC-Berkeley