The National Venture Capital Association recently released the 2009 version of their Venture Impact Report. This report is an analysis of the impact of venture backed companies on the U.S. economy.

The report is a VC industry marketing piece and a bit controversial. For example, a less than positive review is presented in the Tech Crunch article "What Have VCs Done for Innovation," by Vivek Wadhwa. Wadhwa is a successful entrepreneur turned academic researcher with ties to Harvard, Berkeley and Duke (he is a smart guy). 

But whatever you think of the analysis, the report has excellent charts and historical data on the VC industry. My favorite chart from the report is below - the number of companies funded and amount of money invested from 1970 to 2008.   

VC investment 1970 to 2008

As you can see from the chart, the VC industry has grown substantially over the last decade. The growth has been so great, that many now think the VC industry is way too big and needs to shrink by 50% or more. 

Since less than 1 percent of all start-ups get venture funding, the availability of venture capital is irrelevant for most entrepreneurs and small businesses. But for companies and entrepreneurs looking for venture funding, these numbers are sobering and point to a difficult venture-funding environment for at least the next few years.


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