Small technology firms that receive corporate venture capital financing are more likely to be exporters, according to a study issued today by the Office of Advocacy of the U.S. Small Business Administration.
"The study's findings can be helpful for technology start-ups interested in pursuing venture capital financing," said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. "Firms whose business model relies on exporting will be well advised to actively seek corporate venture capital financing."
The study found that the chances of a corporate venture capital backed young technology firm deriving more than 10 percent of its revenue from exports are almost 60 times greater than for firms not receiving the funding. It also found that corporate venture capital tends to flow to technology firms that are slightly older, somewhat larger, and more established than firms not receiving such capital.
In 2000, U.S. corporations provided nearly $20 billion in venture capital, a twenty-fold increase from 1997. That amount was approximately 20 percent of all venture capital disbursed in 2000.
Regional Advocate Mike Hull released the report at a meeting of the Arizona Angels Investor Group, LLC, in Phoenix, Arizona. "We welcome this opportunity to showcase research that helps us understand more fully the needs of our small business clientele," said Arizona Angels President Dee Harris. Joseph LiPuma authored the study, Corporate Venture Capital and the International Intensity of Portfolio Firms, with funding from the Office of Advocacy.
The Office of Advocacy, the "small business watchdog" of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.
For more information and a complete copy of the report, visit the Office of Advocacy website at www.sba.gov/advo.
Washington - June 21, 2007
Release Number: 07-21 ADVO
Contact: John McDowell, (202) 205-6941,
john.mcdowell@sba.gov
Information courtesy of the Small Business Administration.
