Posted on Friday, May 6th, 2011 at 11:19 pm.
As we know, venture capital lies on the opportunity of investing. It involves high risks and it can be very time consuming. However, if the ventured business grows it can reap a very huge reward. A few years ago some venture capital partners are holding back their expenditures amid the financial downturn, according to some financial blogs. This financial crisis made it harder for investors to get funding for startup businesses or business expansion but those who prove themselves during this period of financial crisis will be better positioned to flourish when the economy recovers.
According to the IMF’s World Economic Outlook report last January 2010, they forecasted 3.9% GDP from the said year and projected 4.3% GDP for this year. Some people thought that the global economy recovered faster than what was planned, but some believed that the recovery has been slower than they had hoped. According to IMF chief economist Olivier Blanchard, a global recession has been avoided, so that a gradual recovery of world economy is present. But some developing countries have restored faster after the global crisis particularly in Asia such as China and India, and in Latin America such as Mexico and Brazil. Despite this unstable economic situation, the United States has always been a dominant force in fostering world innovation.
With the economy turning down and some educational concerns remain an issue; the United States has been desperately conscious of a changing world. Transforming ideas into marketable and lucrative products is the greatest skill of venture capital that was challenged by the globalization and technology breakdown in the past years. The venture capital community was more pressured to continue superior performance and maintain competitive edge as the global standards are arising. Since taking his office, President Obama has taken historic steps to lay the foundation for the innovation economy of the future.
The United States strongly focuses on innovation. The Obama Innovation Strategy builds on well over $100 billion of Recovery Act funds that support innovation, additional support for education, infrastructure and others in the Recovery Act and the President’s Budget, and novel regulatory and executive order initiatives according to the White House website.
This is an exceptional time for the venture capital community, and together as a whole, the industry must address venture investments and methods to make certain to have a continued growth direction for promising young or startup companies. The economic situation today creates ideal opportunities for angel investors and venture capitalists. The importance of venture capital lies not only in providing money for this innovation but also ancillary services such as selecting good firms, mentoring entrepreneurs, hiring executives, formulating strategies, and professionalizing companies thus, providing job opportunities for the Americans as well.