Venture-Backed Firms Outperform Private Sector

 

March 21, 2007 -- U.S. venture-backed companies have outperformed all other private-sector businesses in terms of job creation and revenue in recent years, a national study said Wednesday.

Between 2003 and 2005, venture-backed companies across all industries had a 4.1 percent compound annual growth rate in jobs, compared to 1.3 percent for the private sector, and an 11.3 percent growth rate in sales, compared to 8.5 percent, according to the National Venture Capital Association, a Washington-based trade group.

The report, conducted by Global Insight, is based on data from more than 23,000 U.S.-based companies that received venture capital financing between 1970 and 2005.

Venture-backed companies accounted for 10 million jobs and $2.1 trillion in revenue in 2005, representing 9 percent of the private-sector workforce and 16.6 percent of gross domestic product, the study found.

"Venture capital is an integral and critical component of U.S. economic growth and becoming more so every year," Mark Heesen, president of the National Venture Capital Association, said in a statement.

Heesen called on policymakers to foster the "venture capital ecosystem" with greater funding for research and development and more math and science graduates, among other initiatives.

- next -