Venture Capital in Regional Innovation and Growth

Focusing upon venture capital this chapter discusses a number of core issues in geographical aspects of financing investments. It is first explained why geography is important to venture capital investments. The skewed distribution is briefly mentioned above and this will be elaborated in the third section. Much of the literature does not differentiate between different types of venture capital. However, as explained below in section four, there are different geographies for business angels, institutional venture capital and private equity. Likewise, it may be argued that there are different geographies of public and private venture capital investments and investments of different size. The chapter also deals with how geography matters in different phases of the venture capital cycle. The possible geographical specialisation of venture capital firms is dealt with in section five. Whether the above-mentioned policy initiatives are rational will also be briefly discussed in section six.