Venture capital has contributed immensely to the growth of startups in the United States and around the globe. The first and most obvious way this has happened is through capital to meet operational needs. Good ideas need a lot of capital to get them started in the market. Venture capital provides entrepreneurs and innovators with the financial staying power they need to conduct market research, secure patents, launch products, hire teams, and grow companies.
These funds are by no means trivial. The National Venture Capital Association estimates that $22 billion in venture capital is invested in US companies every year and over 20 percent of the US GDP is contributed by companies that were helped by venture capital.
Apart from funding, venture capital builds a bridge between entrepreneurs and investors, allowing the former to gain from the knowledge and experience of the latter. Whenever entrepreneurs need help with fundraising, hiring executives, or dealing with regulators, investors can provide the knowledge, networks, or resources to effectively navigate past these hurdles.