Technological innovation as a value creation driver : a venture capital perspective

Abstract

Venture capital has been a key driver of economic growth and employment. Venture capital funds consider many aspects when selecting targets for investment including the level of innovativeness present within the target’s products and services. This research examines what factors are considered to be most important by traditional and corporate venture capital investors during their investment decision. It continues to investigate the nature of the relationship between the level of innovativeness in products and services and the success in achieving two important steps in the venture capital value creation cycle: receiving investment funding and achieving commercial success. The research finds higher levels of innovation correlate strongly with both value-adding factors, and discovers many additional considerations prioritised by venture capital investors. An additional perspective for considering the value creation from innovation is also proposed.