It’s well recognised that venture capital has a major role to play in supporting innovative businesses to grow. Despite this recognition, there is evidence to suggest a significant decline in venture capital activity in the past two years: In fact, 2009 saw the lowest venture capital investment activity in recent history with the number of investments down by nearly a fifth 2008, and a 27% drop of on the total amount invested.
As a high growth sector that cultivates innovative companies, this issue is particularly relevant to the creative and digital industries.
NESTA (the National Endowment for Science, Technology and the Arts) recently published a report on the significance of venture capital to creative and entrepreneurial businesses. Their report highlights the value of innovative firms to national economic growth. It also points out that such firms are often “dependent on venture capital as a source of pre-revenue finance”. The report explores the issues against the impact of the recent economic crisis upon venture capital investment and the preceding dotcom crash. Read the report in full here.
