6min chapter

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482. Is Venture Capital the Secret Sauce of the American Economy?

Freakonomics Radio

CHAPTER

How Do Venture Capitalists Get Paid?

Venture capital firms have about 550 billion dollars under management the markets. The bulk of it comes from big institutions like pension funds, university endowments and charitable foundations. Out of 21 thousand start ups funded by venture capital, 14, 65 % lost money. Since innovation and invention take time, long term investment is a necessary component of an economy that breeds innovation.

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