California Management Review

Abstract

The article defines the "unrecognized industry," the venture capital industry, and outlines changes that might be wrought in the industry to permit it to achieve its potential. The article is addressed primarily to the problem of obtaining leadership in the emerging venture capital industry. Despite its potential problems, the venture capital industry can count on having some established manufacturing companies in its fold. The increasing rate of technological, social, and economic change is accelerating the creation of new institutions and organizations while simultaneously forcing the existing ones to reshape themselves for survival. The establishment of businesses to provide new products and services is one of the mainsprings of modern economic systems, whether in the highly developed U.S. economy or in a less developed one such as Ghana's. Thus, it is in a nation's economic interest to insure that there is a variety of sources of funding available to these new firms, and it is in this role that a strong venture capital industry can make a major contribution.

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