The Impact of Venture Capital on Job Creation and Economic Growth

The study examines VC's role in job creation and economic growth , highlighting barriers faced by historically marginalized entrepreneurs. With 83% unable to secure institutional funding, venture capital supports only 0.5% of entrepreneurs, mainly in major regional clusters. Women and Black entrepreneurs receive disproportionately low funding, with all-women teams raising just 2.2% of VC funds in 2017 and Black-owned businesses starting with nearly three times less capital than white-owned ones. The Capital Access Lab initiative aims to address these disparities and improve capital access for underserved entrepreneurs.

Why is relevant?

This analysis highlights the critical role of venture capital (VC) in job creation and economic growth while exposing significant disparities in funding access . It reveals that entrepreneurs from historically marginalized groups, particularly women and Black entrepreneurs, face substantial challenges in securing institutional capital. VC funding supports only a small fraction of these businesses, underscoring systemic barriers and inequities within the industry .
The Impact of Venture Capital on Job Creation and Economic Growth, investment firm website screenshot
Author
Kauffman Foundation
Publication date
October 26th, 2023
Difficulty
Intermediate
Keywords
  • Venture Capital Impact
  • Job Creation
  • Economic Growth
  • Startups
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