Financing the Next Silicon Valley

46 Pages Posted: 29 Sep 2008 Last revised: 13 Oct 2013

Date Written: September 22, 2008

Abstract

Silicon Valley's success has led other regions to attempt their own high-tech transformations, yet most imitators have failed. Entrepreneurs may be in short supply in these "non-tech" regions, but some non-tech regions are home to high-quality entrepreneurs who relocate to Silicon Valley due to a lack of local financing for their start-ups. Non-tech regions must provide local finance to prevent entrepreneurial relocation and reap spillover benefits for their communities. This Article compares three possible sources of entrepreneurial finance - private venture capital, state-sponsored venture capital, and angel investor groups - and finds that angel groups have distinct advantages when it comes to funding innovation in non-tech regions. This entrepreneurial finance story is then supplemented by a "law and entrepreneurship" story - specifically, a look at securities laws that might impede optimal levels of angel group financing.

Keywords: Silicon Valley, Entrepreneurship, Economic Development, Angel Investor, Venture Capital

JEL Classification: G24, K22, M13, O31

Suggested Citation

Ibrahim, Darian M., Financing the Next Silicon Valley (September 22, 2008). Washington University Law Review, Vol. 87, 2010, Univ. of Wisconsin Legal Studies Research Paper No. 1065, Available at SSRN: https://ssrn.com/abstract=1272957

Darian M. Ibrahim (Contact Author)

William & Mary Law School ( email )

South Henry Street
P.O. Box 8795
Williamsburg, VA 23187-8795
United States

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