- ATP funds different types of business activities than do
venture capitalists. ATP funds early-stage technology development.
- In contrast, venture capitalists typically fund businesses
that are already engaged in later stage business activities
and well into product development. According to Branscomb
and Auerswald1, only
seed financing rounds by venture capitalists
are dedicated to early-stage technology development.
- One half of one percent of venture capital investments in
2004, $105 million out of a total of $20 billion, funded
early-stage technology development, according to
VentureSource data for 1998-2004 as shown.
- Only one out of four of the over 600 small firms funded
by ATP have received VC funding prior
to the inception of their ATP project. (Source: VentureSource)
- “ [Venture
capitalists] avoid early-stages, when the technologies
are uncertain, and market needs are unknown …Venture
money is not long-term money,” according
to venture capitalist Bob Zider.2
____________________
1 Branscomb
and Auerswald, “Between
Invention and Innovation: An Analysis of Funding for Early-Stage Technology
Development,” NIST GCR 02-841, November 2002.
2 B.
Zider, “How
Venture Capital Works” Harvard Business Review, pg. 131-137,
November 1998.
Factsheet 1.C8 (March 2005 by Gary Anderson)
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