Venture Capital Is a Tiny Share of Finance but a Major Driver of Innovation

Venture Capital—Supporting Modern Technological Innovation Yale economist Chen Zhiwu argues that Britain’s great era rested on overseas trade, while America’s rested on technological innovation. These require different financial support: the former needs debt, banking, and insurance; the latter needs risk capital, represented by equity. VC has strongly supported US economic development. Fewer than 1% of newly formed US companies receive it, and total VC is only about 0.2% of GDP. Its influence is far greater than that share. In Zero to One, entrepreneur and investor Peter Thiel notes that VC-backed companies create 11% of private-sector jobs; twelve large VC-backed technology companies together were worth over US$2 trillion, more than all other technology companies combined. #Staying focused on technology-innovation investment ---- Robin: 1. Even in the United States, getting VC is a very low-probability event, perhaps 1–2%. Taiwan is actually similar, and may even be higher XD. 2. VC is an alternative asset. Its share of total financial assets is tiny. Add real estate, insurance, securities, bank deposits, bonds, derivatives such as futures and options, and commodities, and it may be below 0.1%. 3. Yet that 0.1% drives innovation and entrepreneurship, technological change, and national economic development, upgrading, and transformation. 4. Encourage Taiwan’s large companies, financial institutions, family offices, and wealthy individuals to allocate 1–2% of assets to early-stage investment and VC. Besides potentially creating extraordinary wealth, this could contribute to Taiwan and foster an atmosphere of innovation, entrepreneurship, and value creation, helping it face future challenges more confidently.