Venture Development

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Venture development describes economic development activity that is focused on using best-practices and activities of experienced business mentoring and pre-angel and venture capital investing in order to help create venture and angel-capital-ready firms which have the promise to create significant economic wealth for a region, state or country including entrepreneurial wealth and jobs.

Communities that do not have recent significant history or a critical mass of current venture-backed firms are beginning to pursue venture development as a way to help their local economies begin to transform their ability to create and support such organizations.

Venture development organizations typically are organized as not-for-profit corporations. They may manage for profit or not-for-profit seed funds. Their sources of financial support are corporations, local and state governments, universities, research institutions, foundations, and individuals.

Why is Venture Development Important?[edit]

Venture-backed firms now account for a significant portion of current jobs in the U.S. economy.[1]

  • Employees from venture-backed companies represent 9 percent of all private sector U.S. employment and the revenues from venture-backed companies represent 17.6 percent of U.S. GDP
  • U.S. companies that received venture capital resources from 1970-2006 now account for 10.4 million jobs and $2.3 trillion in revenue in the U.S. economy
  • Venture-backed companies also grow much faster (revenues and employees) versus non venture-backed companies (11.8 percent versus 6.5 percent in revenues and 3.6 percent versus 1.4 percent in employment between 2003 and 2006)

As a result of these existing and on-going trends, the economy of communities that do not have a significant set of venture-backed firms will suffer on a competitive peer basis when evaluating economics such as job growth and per-capita income.

Example of Venture Development[edit]

JumpStart Inc.[1] is a non-profit venture development organization in Northeast Ohio that has exemplified the venture development model since its inception in 2004. JumpStart is a non-profit organization focused on promoting entrepreneurship by investing in high-growth potential entrepreneurs and assisting them to propel their business to the next level of funding by providing business assistance through their Entrepreneur-in-Residences and guidance in raising subsequent investments (either Angel Investor or Series A Venture Capital). With a venture development organization such as JumpStart, 100 percent of its return on investment is placed back into the fund; ROI is not JumpStart’s priority, as with a venture capital organization. JumpStart’s charitable gifts from funding partners are all focused on economic development returns or regional wealth creation, while venture capital firms have limited partners.

by Abdulilah Assalami


  1. ^ National Venture Capital Association’s 2006 edition of “Venture Impact: The Economic Importance of Venture Capital Backed Companies to the U.S. Economy:”