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Unformatted text preview: Chapter 14 Finance and Innovation Burton Malkiel 1. Introduction a. Free-market innovation machine: responsible for the great growth in free market economies and for the productivity improvements that have been an integral and essential conditions for this growth b. Purpose: role of finance in encouraging innovative break-through and in making it possible for many entrepreneurs and especially many new companies to obtain the capital to bring innovations to the market. c. Problem: entrepreneurs cant gain money from innovations if they can get the resources to produce it. d. The importance of capital raising system to increase and induce innovation in a country e. Growth of Biotech industry and Information Technology will be discussed f. Leads to overinvestment 2. Venture Capital Firms a. Raise money from wealthy individuals and from institutional investors to make investments in early-stage businesses that offer high potential rewards and high risks b. All major companies in the past 25 years have been provided with seed capital by the venture capital...
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This note was uploaded on 11/29/2010 for the course PSC 222 taught by Professor Jing during the Spring '10 term at Rochester.
- Spring '10
- Free Market