Dane Carlson recently posted some interesting research from Babson College and the London School of Business which concluded that “fewer than one in 10,000 companies in the United States receive their initial funding from venture capital firms”.
Heidi Neck, an assistant professor of entrepreneurship at Babson College, estimates that fewer than 2 percent of companies ever receive venture capital financing. That leads her to believe that too much emphasis — including media attention, education and government support — is given to venture-backed startups.
“Historically, some of the greatest companies in the world have started with less than $5,000,” Neck said. “There’s too much weight put on venture capital. In the last five years, we have put venture capitalists on pedestals where we think they are going to create these great companies.”