Media Myth Debunked: 21% of GDP and 11% of Private Sector Jobs Come From Venture Capital
In their attempt to demonize Republican presidential candidate Mitt Romney, the Obama-loving media have been misinforming Americans that venture capitalists are robber barons and corporate raiders preying on failing companies to suck every penny out of them with total disregard for employees.
What these ignorant and/or dishonest members of the press are hiding from the electorate is that venture capital-backed companies were responsible for 21 percent of the Gross Domestic Product in 2010 while creating 11 percent of the nation's private sector jobs.
If Barack Obama once worked for a venture capital firm, rather than such entities being labeled as the scourge of the earth, media would have told the citizenry that VC has been a powerful economic force in this nation for a very long time with the first organizations devoted to such investment having been founded in 1946.
Early companies seeded with VC money were Digital Equipment Corporation (DEC), Fairchild Semiconductor, and the precursor to Minute Maid which was later purchased by Coca Cola.
In a subsequent decade, two leaders in their respective industries were funded by VC firms: Apple and Genentech. The successful public offerings of both in the early 1980s was responsible for an explosion in such private investing.
According to the most recent Venture Impact, a bi-annual report created for the National Venture Capital Association, the following household names were founded with VC funds: Amazon, Apple, Boston Scientific, Cephalon, Cisco, Costco, eBay, Facebook, FedEx, First Solar, Genentech, Genzyme, Google, Home Depot, Intel, Microsoft, Skype, Staples, Starbucks, Tesla, and Twitter.
Think you would have heard that if Obama had worked for a VC firm?
Some other data compiled for NVCA that you'd likely have heard if Romney were a Democrat:
- 21 percent of 2010 GDP came from VC-backed companies
- 11 percent of 2010 private sector employees worked for VC-backed companies
- 17,000+ IT companies have been VC-funded
- 4,800+ healthcare companies have been VC-funded
- 900+ clean technology companies have been VC-funded
- 90 percent of software jobs were created by companies funded by VC
- 74 percent of biotechnology jobs were created by companies funded by VC
- 72 percent of semiconductor/electronics jobs were created by companies funded by VC
- 54 percent of computer jobs were created by companies funded by VC
- 48 percent of telecommunications jobs were created by companies funded by VC
- 88 percent of the sales from the semiconductor/electronics industry comes from companies funded by VC
- 80 percent of the sales from the biotechnology industry comes from companies funded by VC
- 46 percent of the sales from the computer industry comes from companies funded by VC
- 40 percent of the sales from the software industry comes from companies funded by VC
- 39 percent of the sales from the IT services industry comes from companies funded by VC.
When you add it all up, venture capital is not only responsible for funding some of America's largest companies, such financing is a huge part of our economic growth and job creation.
Indeed, VC has been fueling our economy for decades. Great companies, innovations, and products have come as a result as have employment, convenience, improved health, and significant cost savings.
Unfortunately, this is not the picture being painted of this industry by media hell-bent on getting Barack Obama reelected, and all those participating in this disgraceful misinformation campaign should be held to account.
What these guilty parties have also ignored in their pursuit to demonize VC is that one of their favorite Democrats, none other than Nobel laureate Al Gore, is a member of Silicon Valley's most prestigious VC firm Kleiner Perkins Caufield & Byers.
Given the almost unprecedented esteem afforded Gore by America's media, it appears it's only evil to be a venture capitalist if you're a Republican.
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