Does VC foster innovation or just fund it? This paper argues that VC has a causal impact on patenting rates. It finds that a dollar of VC funding is 3-4x more potent at generating patents than a dollar of corporate R&D. The study attributes this to the 'tolerance for failure' inherent in the VC model, which encourages moonshot experiments that public companies would kill. However, it notes that this effect is concentrated in a few high-tech industries.

VC is the R&D lab of the economy. For founders pitching deep tech, this archive provides the academic backing for your high burn rate. It justifies spending on R&D as an asset creation strategy, not an expense. It frames your startup as a high-efficiency innovation engine compared to slow-moving corporate incumbents.