Watching What Serial Entrepreneurs and the VC Syndicates are Doing Today to Discover Innovation Investments Tomorrow
Private Capital Market Working Paper No. 08-08-01
5 Pages Posted: 7 Oct 2008
Date Written: May 23, 2008
Abstract
Our interest in writing this article is to create a bridge between the scholarly and academic research on technological innovation and a private sector, for-profit business model that implements the ideas on innovation and entrepreneurship, primarily in metro regional economies.
The search for innovation investments often means looking for indicators that, on first glance, do not appear to be related. This same type of ambiguity in relating factors that do seem to be related affects the entire method of investigating the direction of technology in a metro regional economy.
Predicting technology and market events in the future based upon seemingly unrelated events today is somewhat counter-intuitive, and is guided by a theory about technology that uses biology as a metaphor to explain technological innovation. Essentially, technological genetics can be crossed between industrial sectors that happen to share certain types of technological affinities. (Feser, 2005).
We review the evidence related to VC funding of innovation deals as a roadmap for finding innovation investment opportunities. We explain our use of the term VC Dr. Kervorkian Effect.
We explain that if the public policy goal of innovation economics is a higher commercial success rate of innovation investments, then relying on the VC funding model may not be a wise idea.
From the perspective of regional innovation economic development, the presence of a strong VC syndicate in the region may be a mixed blessing indeed. When they apply their Dr. Kervorkian technique to otherwise commercially-viable enterprises in the local economy, they kill off a round of beneficial economic growth that would otherwise benefit the residents who live there.
Keywords: Dr. Kervorkain Effect, VC, venture capital business model, SERET, regional private capital markets
JEL Classification: L16, M13, O16, O31, O32, O33, O34, O38, R58
Suggested Citation: Suggested Citation