Data and Code for: Venture Capital’s Role in Financing Innovation: How far we have come and how much we still need to learn

In this paper, we argue that despite the innovation and growth generated by the venture capital (VC) industry, VC also has very real limitations in advancing substantial technological change. We identify three main issues: (1) The very narrow band of technological innovations that fits the requirements of institutional VC investors, (2) the relatively small number of VC investors who hold and shape the direction of a substantial fraction of capital that is deployed into financing radical technological change, and (3) The relaxation of the intense emphasis on corporate governance by VCs in recent years.<br><br>We begin by tracing the growth of the institutional venture capital industry. We then highlight how technological and institutional changes in the past two decades have narrowed the focus of and concentrated the capital invested by VCs. We highlight recent research examining the potential real effects that these changes can have. We end by speculating on potential adaptations to the venture capital model might enable a broader base of ideas and technologies to receive risk capital. <br>