Explore, Compare and Contrast the Determinants of Venture Capital Investments in Different Sectors of the American Economy

Abstract

This thesis demonstrates that different sectors of the economy have different drivers of venture capital investments (VC). Furthermore, VC investments even within the same sector have different drivers at different stages of development of the new enterprise. The research shows that drivers of VC investments are broadly different across three subset categories. These categories are defined based on whether the sector is manufacturing based or services based and the level of technological innovation involved within those sectors. Sarbanes-Oxley Act of 2002 demonstrates its negative effect on VC investments in some sectors but its negative impact does not seem to be as pervasive as generally thought.