1、- 1 - 中文 3300 字 Developing a Venture Capital Industry The economic success of Silicon Valley has not gone unnoticed in other parts of the globe. Governments across the world look enviously at the region and try to imitate its economic structure. Because of the central role venture capitalists play i
2、n the entrepreneurial process, the development of a venture capital industry has become a focus for these governments. Yet little is known about how countries could replicate the complex infrastructure that supports such an industry. Modern venture capital originated in the United States in the 1950
3、s and is most evolved in Silicon Valley. Several European and East Asia countries have developed their own venture capital industries, although they look markedly different from those in the United States. Even the definition of venture capital varies widely across countries. Financial Market Struct
4、ure Probably the most frequently mentioned obstacle to developing a venture capital industry is the absence of a liquid initial public offering (IPO) market, which can provide venture capitalists with an exit mechanism to harvest their successful investments. The United Kingdom has a relatively well
5、-developed IPO market that supports the largest venture capital industry in Europe. And since the introduction of the Neuer Markt, Germany has witnessed a dramatic increase in venture capital. How can countries promote the development of a stock market segment that serves young entrepreneurial compa
6、nies? Germanys experience suggests that regulations should not be relaxed uniformly. Instead, listing criteria should be adapted to the needs of entrepreneurial companies, and disclosure requirements should remain rigorous, to ensure investor confidence. There is, however, some question about the re
7、lative importance of stock markets. First, venture capitalists often seem to be able to substitute acquisitions (trade sales) for IPOs to obtain liquidity. Probably more important, the National Association of Securities Dealers Automated Quotation System (NASDAQ) has effectively provided an exit opt
8、ion for investors in other countries, such as Israel. This suggests that the development of a domestic stock market may not always be the highest priority. Clearly, a venture capital industry needs investors willing to invest in high-risk, high-return assets. In the United States the largest demand
9、for this class of assets comes from large institutional investors. Outside the United States banks tend to be the industrys largest funding sources. But as incumbent financial institutions, banks may not have the right incentives and capabilities to develop venture capital markets. Banks in the Unit
10、ed States play a small and conservative role in venture capital, especially shying away from true early-stage venture deals. The stock market dominates the U.S. economy, while banks play a more active role in other countries. In Germany, for example, banks actively promoted venture capital. These ef
11、forts were largely a disaster, however, generating financial losses and casting doubt on the credibility of others that were pursuing the concept. Human Resource Availability - 2 - Venture capital can only thrive with an adequate supply of entrepreneurs. Whether people in a particular country want t
12、o become entrepreneurs depends on such factors as the countrys entrepreneurial tradition, the social recognition of the entrepreneur, the flexibility of the employment system and social safety net, and the security of jobs in large corporations. The Japanese employment system, for example, is consid
13、ered relatively inhospitable to entrepreneurship. A bright Japanese engineer would not only have to give up life-time employment to start a business, but would also have considerable difficulty hiring employees for the new company, would receive less social recognition for taking on the risk of a st
14、artup, and could face considerable difficulty in finding new employment in case of failure. In contrast, engineers in Taiwan earn considerable prestige by working for young entrepreneurial companies. In addition to entrepreneurs, the venture capital industry needs skilled venture capitalists. The re
15、wards and prestige of being a venture capitalist will affect the quality of work and the quality of people who decide to become venture capitalists. Consider the difference between an independent venture capital firm, where a general partner makes decisions, and a “captive” venture capital firm that
16、 belong to an established corporationor bank, where a salaried employee makes decisions. The salaried employee of the large corporation is unlikely to perform the same quality work as a general partner of a well-endowed venture capital fund that allows generous profit sharing (20 percent is standard
17、 in Silicon Valley). Managers of captive venture capital funds are less likely to develop the appropriate mindset to become good venture capitalists. In Japan and Germany, for example, large banks use their regular employees to run their venture capital operations. These employees behave much more l
18、ike traditional conservative bankers than venture capitalists. They perceive avoiding losses, rather than taking significant risks, to be in their career interest. Availability of human capital is also critical for the growth of new firms. In Silicon Valley most of the successful companies are run n
19、ot by their original founders, but by experienced professional managers. Moreover, the ability of entrepreneurial companies to attract workers at all skill levelsfor example, by offering stock optionsis crucial. Silicon Valley, where the scarcest resource is talent, not money, has seen a remarkable
20、cultural shift. In business schools thirty years ago the most sought-after jobs for MBAs were in industry. Fifteen years ago the highest prestige was in consulting and investment banking. Today the best students aspire to become venture capitalists or entrepreneurs. The relevant question for many co
21、untries may not be so much whether there are people who want to become entrepreneurs or venture capitalists, but whether the most talented people do so. Source of Opportunities The availability of opportunitiesthe basis of creating a good deal flowis related to a number of factors: * How good is the
22、 technology and research environment? * Are there channels of communication between research and industry that allow for commercialization of new technological research? * How accessible are domestic markets to entrepreneurs? * How easy it to set up a firm in the first place? - 3 - * Is regulation p
23、redictable enough that entrepreneurial opportunities are not converted into opportunities for holdup by bureaucrats and other powerful agents? Supporting Institutions Silicon Valley has a rich array of firms and professionals that specialize in tasks that benefit entrepreneurslawyers, accountants, c
24、onsultants, subcontractors, head hunters, public relations firms, and so on. In addition, Silicon Valleys environment is said to be particularly fluid, based on networking among decentralized actors rather than more centralized mechanisms. Other countries do not have this level of specialized suppor
25、t services because such specialization only pays with a vibrant entrepreneurial sector. The dynamic may be self-reinforcing: the growth of the entrepreneurial sector in Silicon Valley creates the emergence of specialized support services that in turn facilitate the formation of even more startups. T
26、he relevant question is how to promote the development of a complex system populated by many complementary institutions. Government Policy Through policy choices the government affects the size and structure of the venture capital industry. Government actions fall into three broad categories. First,
27、 the government can have a creative function. In Singapore, for example, the venture capital industry is the result of a series of promotional measures taken by the government. Virtually every government has some program of subsidies or other help to small enterprises. Second, government policies su
28、ch as tax policies and regulations of venture investments directly affect the venture capital industry. Third, laws and regulations governing pension funds, stock markets, labor markets, patents, and other areas affect the venture capital industry indirectly. Concrete policy questions include the ap
29、propriate level of the capital gains tax and the kind of programs the government might use to encourage entrepreneurial activity. The happy venture capitalist diagram is meant to provide an organizing framework for developing a list of other topics and questions. Other, more fundamental questions re
30、late less to specific policy than to the process of government promotion of venture capital, as exemplified by three interrelated policy dilemmas. The first concerns comparative advantages. Good opportunities abound in most economies, but these opportunities typically look very different from those
31、in the United States. While highly developed economies in Western Europe and East Asia may have comparative advantages in some fields of high technology, many less-developed countries have fewer industries to attract venture capital. India, for example, at first accepted outsourcing for mundane and
32、labor-intensive tasks in information technology, but it used these activities as a platform to develop new skills, gradually moving up to higher value-added tasks such as software development. Not every country would find it advantageous to build the entrepreneurial economy and active venture capita
33、l markets that the United States and a few other countries have managed to develop. An important question is whether a venture capital industry is even useful or necessary without high technology? And how should a countrys future comparative advantages be assessed, especially since entrepreneurial activity is inherently hard to predict?
