This White Paper is a very important contribution to the discussion of the role and importance of the private venture capital industry with some concrete solutions to the current crisis
McLean, VA (PRWEB) September 21, 2009
Jonathan Aberman, Managing Director of Amplifier Venture Partners, today released "The Decline of the United States Venture Capital Industry: What the Federal Government Should Do About It." The White Paper discusses the current problems and challenges to the private venture capital model and offers specific policy recommendations to the Federal Government to address these challenges.
In the White Paper, Mr. Aberman argues that addressing the shrinkage of the private venture capital industry and the loss of countless experienced company builders is a matter of urgent national economic policy. The venture capital industry is becoming configured to make larger investments in less innovative companies, as it is driven towards making less risky investments to satisfy the current investment preferences of its institutional investors. As the venture capital industry is moving away from more speculative investments, particularly early stage investments and investments in emerging technologies, the United States economy is losing a primary driver of technology commercialization.
As noted recently by the National Venture Capital Association, more than 21% of the 2008 United States GDP was provided by venture capital backed companies. Mr. Aberman argues that government action to promote the formation of early stage focused venture capital funds, and actions to promote a closer career progression between government and private sector technology commercialization are necessary for the US to continue to benefit from venture capital's important role as a driver of economic development.
"I am not suggesting a VC Bailout" said Mr. Aberman, "the market should continue to reward and punish investors on the most important criteria - do they provide profits for their investors. However, we need to recognize that at this moment in our nation's economic development we need more early stage capital and experienced company builders, not less. We should act in ways that would be consistent with the private market and provide the ground work for the next generation of industrial development and entrepreneurs."
"This White Paper is a very important contribution to the discussion of the role and importance of the private venture capital industry with some concrete solutions to the current crisis," noted Don Rainey, General Partner of Grotech Capital Group. "I hope that Mr. Aberman's thoughts provide a basis for policy makers and the venture community to work together to address these issues."
For a copy of "The Decline of the US Venture Capital Industry: What the Federal Government Should Do About It" visit http://www.amplifierventures.com/whitepaper
About Amplifier Venture Partners
Amplifier Venture Partners is a group of early stage venture capital funds that have been operating since 2005. It has eight current investments in emerging software businesses in the Mid Atlantic. Amplifier's investments include Bright Hub, Hook Mobile, iBelong Networks and Zenoss. Amplifier also operates the Amplifier Business Accelerator Program, which helps entrepreneurs bootstrap new companies, and has four current investments through this program - Cardstar, Guitar Affair, Vente Networks and Veriam. It generally is the first institutional investor in the companies that it finances.
About Jonathan Aberman
Jonathan Aberman has been involved with early stage company formation for 20 years, first as an attorney at nationally known law firms, and then as a professional venture capitalist. He has prior experience as an investment banker and arbitrage trader in London, England. Mr. Aberman holds an MSc in Econoimcs from the London School of Economics and law degrees from Cambridge University and New York University. He is an Adjunct Professor at both the Smith School of Business, University of Maryland and Kogod School of Business, American University, where he lectures on Venture Capital, Private Company Corporate Finance, New Business Creation and other topics. He also writes a blog Amplified on issues affecting entrepreneurship and the economy.