Innovation and Venture Capital : - A minor case study on the Swedish venture capital industry's effect on innovation

• Main Author: Timell, Fredrik
• Format: Others
• Language: English
• Published: KTH, Industriell ekonomi och organisation (Inst.) 2013
• Subjects: innovation; venture capital; finance; entrepreneurship
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-123676

A country’s economic growth is often related to its ability to be innovative. Innovation is unluckily difficult to measure and it is hard to find a specific source of innovation. Start-ups/new firms are however one of those specific sources. One investment type that has specialized in investing in young and highly technological portfolio-companies is venture capital. This thesis therefore aims to investigate the impact that the venture capital industry has on young and innovative companies in Sweden by a literature review and a quantitative study of approximately 60 different companies. By firstly thoroughly examining the underlying scientific theory for this subject and furthermore examining both the international as well as the Swedish venture capital industry it was possible to conduct an empirical study. A selection of young companies was taken from an impartial source and then identified as innovative or not by Schumpeter’s definition of innovation. Moreover these companies were investigated on the premises on whether they had been invested in by venture capital or not. It was found that the Swedish venture capital industry is highly involved in young and innovative Swedish companies, and a linkage between innovation and venture capital exists. However the answer to the question on whether it is venture capital that drives innovation or if it is already innovative companies that attract venture capital is inconclusive in this thesis and future studies in this field is needed.