Introduction

Abstract

The objectives of this comparative study are to generate analytical insights into the role of venture capital as a means of financing new technology based firms. Venture capital does not solely focus on new technology based firms. For example, financing the expansion of established companies as well as the financing of management buyouts and buyins constitutes a major part of this investment business. However, with regard to the historical role VC has played in the development of today’s large businesses such as Apple, Advanced Micro Devices, Digital Equipment, or Intel, new technology based firms can be seen as important vehicle in the commercialization of technological inventions. It is well-known that the process of developing new technology involves uncertainty and risk. Hence, venture capital - in its traditional role - is a suitable means of fostering technological development.¹