Venture-backed firms faster at growing jobs, revenue

Venture-backed firms in the United States grew both revenue and jobs faster than non-venture backed companies and accounted for 21 percent of the U.S. GDP in 2008, according to a report by the National Venture Capital Association.

The report, based on IHS Global Insight research, shows that venture-backed companies employed more than 12 million people - 11 percent of the total private sector employment - and generated nearly $3 trillion in revenue in 2008.

"These findings extend trends regarding venture capital’s outsized impact – or “ripple effect” – on the U.S. economy that stretch back to the first edition of this report, published in 2001," the report says.

"Venture-backed companies outperformed the overall economy in terms of creating jobs and growing revenue...and continues to produce some of hte U.S. economy's best performers," it adds.

It points out that the VC industry continues to grow entire new industries from scratch, playing an instrumental role in creating and nurturning the IT, biotech, semiconductor and online retailing industries, while investment data suggests that social media and clean tech will join that list.

The report says that for every dollar of venture capital invested from 1970 to 2008, it generated $6.38 in revenue in 2008, creating one U.S. job for every $37,702 invested.

In the Southeast Georgia came in at number 5 on the top ten list of employment at VC-backed firms in 2008, with Tennessee number 7 and Florida at 11.

In revenue produced by VC-backed companies, Virginia ranked 7, Florida 9, Tennessee 11, and Maryland 14 in 2008.

Maryland had the second highest rate of growing revenue and employment at VC-backed firms from 2006-2008.

For the full report see: http://bit.ly/2iyl0A.

September 17, 2009

By Allan Maurer From: TechJournal South