Back

SamCtrlPlusAltMan

 • 

OpenAI • 5m

Have you ever heard of a British Apple, a French Tesla, or a Japanese Google? ❌ NO ❌ The simple reason is – Venture Capital. Research shows that there’s a causal relationship between Venture Capital (VC) and economic growth. In 2015, Stanford professors Ilya Strebulaev and Will Gornall published their seminal study, The Economic Impact of Venture Capital: Evidence from Public Companies. They analyzed 12,330 US public companies—including the largest 300 in the US and the top 50 in each G7 nation—classifying them as VC-backed or not, and then tracked their growth trajectories over time. A natural experiment occurred in the US in 1974 with the passing of the Employee Retirement Income Security Act (ERISA), which allowed retirement funds to invest in VC. This reform spurred a dramatic surge in VC funding—from a mere $0.1 bn to $4.4 bn per year—and transformed the U.S. economy: 🇺🇸 In the US today: • VC-backed companies account for 41% of total market capitalization. • They command 62% of public companies’ R&D spending. • They generate 48% of the value of patents. • For the latest cohort, VC-backed firms constitute 50% of companies by number, but represent 75% of market cap, 92% of R&D spending, and 93% of patent value. 🤯 Now, let’s look at India—a country that’s rapidly emerging as a global VC powerhouse in its own right: 🇮🇳 Indian VC Landscape Highlights: • Explosive Growth: VC investments in India have surged from $3.1 bn in 2012 to a staggering $38.5 bn in 2021. The number of VC deals tripled—from 458 in 2012 to 1,545 in 2021—demonstrating a vibrant and maturing startup ecosystem. • Innovation Driver: Indian startups, fueled by VC funding, have not only created numerous unicorns (currently 108 and climbing) but also boosted innovation. For instance, patent filings by startups have skyrocketed, reflecting a robust commitment to R&D. • Economic Impact: Studies reveal a strong positive correlation between VC investments and GDP growth in India. Regression analyses indicate that every $1 bn increase in GDP is associated with approximately a $10.3 million increase in VC investments, highlighting how VC fuels job creation and technological advancement. • Government Support: Initiatives such as Startup India and the recent abolition of the angel tax have reduced barriers and spurred investment, ensuring that VC isn’t just a U.S. phenomenon but a global catalyst for innovation. Without VC, many of today’s tech giants, be it Google, Tesla, or Apple, would never have reached their current scale. Similarly, VC is building the future in India, where supportive policies, a young tech-savvy workforce, and a dynamic entrepreneurial culture are converging to transform the economy. In short, Venture Capital built the present in the US, and it’s powering the rise of the Indian economy today.

5 Replies
3
16
Replies (5)

More like this

Recommendations from Medial

Image Description

Mayank Kumar

Strategy & Product @... • 1y

The Impact of Venture Capital on Innovation! Venture capital (VC) plays a crucial role in driving innovation. By providing the necessary funds, VCs enable startups to scale and develop groundbreaking technologies. Think of companies like Uber, Air

See More
1 Reply
1
5
Image Description

VCGuy

Believe me, it’s not... • 4m

'What are the different roles in Venture Capital?' is a question commonly asked. VC Firms are structured very differently. Each role works → to source deals, evaluate investments and support portfolio companies. Mapped out the structure of a VC

See More
1 Reply
6
24
Image Description
Image Description

Magudapathi R

Hey I am on Medial • 10m

Hi, Friends just give some overview about the Venture capital and how to reach the VC where am I suppose to find the VC

8 Replies
5
9

Sairaj Kadam

Entrepreneur • 11m

Exploring Venture Capital: Fueling Startup Growth Hello again, everyone! Today, let’s take a closer look at a powerful funding method that’s been behind some of the world’s most successful startups—Venture Capital (VC). If you’re aiming for rapid g

See More
Reply
2
Image Description

Arya Ketan

curious • 1y

Startups in the US create actual value, while startups in India focus on expanding valuations. Value creates a strong country, and valuation creates the lifestyles of founders and venture capitalists... #startup #funding #vc

1 Reply
1
6
Image Description

Vivek kumar

On medial • 4m

Uday Kotak warns that India's economic 'animal spirits' are fading as young business families focus more on investments than building companies. He urges policymakers to address the impact of US policies pulling foreign capital away. Kotak stresses t

See More
2 Replies
5
Image Description

Vikas Acharya

 • 

Welbe • 12d

𝙏𝙝𝙚 𝙑𝙖𝙡𝙪𝙖𝙩𝙞𝙤𝙣 𝙋𝙡𝙖𝙮𝙗𝙤𝙤𝙠: 𝙐𝙣𝙡𝙤𝙘𝙠𝙞𝙣𝙜 𝘾𝙤𝙢𝙥𝙖𝙣𝙮 𝙑𝙖𝙡𝙪𝙚 𝙬𝙞𝙩𝙝 𝘿𝘾𝙁, 𝙑𝘾 𝙈𝙚𝙩𝙝𝙤𝙙, 𝙖𝙣𝙙 𝘾𝙤𝙢𝙥𝙨 Unlock the secrets to company valuation! This comprehensive guide walks you through the essential methods

See More
2 Replies
10
16
Image Description
Image Description

Havish Gupta

Figuring Out • 4m

Jeff Bezos says that the single most important reason most successful companies are in the US is risk capital. In the US, you can raise $50 million in seed funds, and that doesn't work anywhere else. And that's the reason why most of the successful

See More
3 Replies
24
27
Image Description
Image Description

Mayank Kumar

Strategy & Product @... • 1y

Startup Funding 101: Bootstrapping vs. VC Funding Deciding between bootstrapping and venture capital (VC) funding is a critical choice for startups. Bootstrapping involves self-funding and can offer more control but may limit growth potential. V

See More
3 Replies
9

Download the medial app to read full posts, comements and news.