This paper examines the circumstances leading to the launch of Venture Capital: An International Journal of Entrepreneurial Finance in 1999, while highlighting significant transformations in the entrepreneurial finance market over the past two decades. The study identifies several key structural shifts that have reshaped the venture capital (VC) industry and its role in funding high-growth startups.,One of the most notable changes has been the decline of “Classic” Venture Capital, a model that traditionally focused on early-stage, high-risk, high-reward investments in technology and innovation-driven startups. Over time, many VC firms have shifted their focus toward later-stage investments, favoring more mature startups with proven revenue models and lower risk profiles. This transition has contributed to a growing funding gap for early-stage companies, making it more challenging for seed-stage startups to secure investment.,Another major development has been the effective closure of the small-cap IPO market, which previously served as a key exit route for VC-backed firms. With the decline in IPO activity, particularly for smaller, high-growth companies, many startups now face longer exit timelines and must rely on mergers, acquisitions, or alternative funding sources to achieve liquidity events. This shift has altered VC return dynamics, pushing firms to seek more structured investment strategies and extended holding periods.,Additionally, the study highlights the scale-up problem and the emergence of a second equity gap, where startups that successfully secure early-stage funding often struggle to raise follow-on capital to scale their operations. This issue is particularly pronounced for companies transitioning from Series A to growth-stage financing, as fewer investors are willing to take on the risk of scaling companies that have yet to achieve profitability.,The geographical dispersion of venture capital is another important trend, as investment activity is no longer concentrated solely in traditional hubs like Silicon Valley, London, or Berlin. Instead, VC investments have increasingly expanded to emerging markets, regional innovation clusters, and secondary startup ecosystems, creating new opportunities and challenges for fund managers and entrepreneurs alike.,Lastly, the institutionalization of the business angel market has played a crucial role in bridging early-stage funding gaps. Business angels, once operating primarily as individual investors, have increasingly formed structured networks, syndicates, and angel funds, improving deal flow efficiency, due diligence processes, and access to capital for early-stage startups. This institutionalization has helped fill the void left by traditional VCs moving toward later-stage investments.,By examining these transformations, the paper provides valuable insights into the evolution of entrepreneurial finance, the challenges facing startups at different growth stages, and the shifting investment landscape. Understanding these changes is essential for entrepreneurs, investors, and policymakers seeking to navigate the complexities of venture capital and develop sustainable funding strategies for innovation-driven businesses.,

A series of special issues have been dedicated to analyzing the evolution of the Risk Capital Market, exploring its structural changes, investment patterns, and emerging challenges while drawing key implications for future research. These issues have provided a comprehensive examination of the shifting dynamics within venture capital (VC), private equity, angel investing, and alternative funding sources, highlighting how the risk capital ecosystem has adapted to economic cycles, technological advancements, and regulatory developments.,One major theme in these studies is the decline of traditional venture capital models, particularly the retreat from early-stage investments as many VC firms have shifted focus toward later-stage funding rounds with lower risk profiles and higher return predictability. This trend has widened the early-stage funding gap, forcing entrepreneurs to seek capital from angel investors, crowdfunding, and government-backed initiatives. The institutionalization of the angel investment market, characterized by the growth of syndicates and structured networks, has played a crucial role in bridging this gap and enhancing deal-flow efficiency.,Another critical development is the changing exit landscape, particularly the decline in small-cap IPOs and the increased reliance on mergers and acquisitions (M&A) as primary exit strategies. This shift has implications for VC return structures, fund cycles, and investment horizons, as firms must now hold onto investments longer and navigate more complex secondary market dynamics. Additionally, the geographical dispersion of venture capital has led to a broader distribution of startup funding, extending beyond traditional hubs like Silicon Valley and London into emerging markets, regional innovation clusters, and secondary cities.,These special issues have also examined the rise of alternative financing models, such as venture debt, revenue-based financing, and corporate venture capital (CVC), reflecting a growing diversification of funding sources. The expansion of impact investing and ESG-driven venture capital has further reshaped the investment landscape, integrating social and environmental considerations into risk capital decisions.,By charting these developments, the research presented in these special issues provides a roadmap for academics, policymakers, and practitioners to better understand how risk capital markets function, the evolving challenges startups face in securing funding, and the implications of these changes for economic growth and innovation ecosystems. These insights not only contribute to venture capital theory and practice but also help shape policy interventions and investment strategies that support sustainable entrepreneurship and long-term market stability.,