Dissertation Summary : Venture Capital and Innovation

This dissertation explores the relation between venture capital and innovation. There are three main findings. First, venture capital funding is associated with an increase in the rate of companies' innovative activity. However, this increase appears to occur at the expense of innovation quality. Second, venture capital funding increases the diffusion of companies' technical knowledge. Results are consistent with two mechanisms: venture capital investors certify the value of innovations to the general public, and facilitate communication among companies in their portfolios. Third, companies in the same venture capital network produce similar innovations, especially if the companies belong to different industries or geographies