(I-Newswire) December 21, 2009 - Some people suggest that Venture Capital is just in a normal cyclical downturn. Not a single venture backed company went public in second quarter of 2008. This has not happen since 1978. This was followed up by no venture backed companies going public in second and third quarters of 2009. This is clearly not just a cyclical downturn.
Venture Capital is built on technology start-up companies whose main assets are inventions. The value of these inventions is determined not just by their technical merit, but the strength of title to the invention. If legal title to the invention is weak, then a great technical invention provides a very limited opportunity for the start-up company or its investors. This clearly reduces the value of the company and the chances of return for it investors. Since 2000 the U.S. has significantly weakened inventors’ title to their inventions.
Original Article: Why is the Venture Capital Model Dying?
