TY  - JOUR
AU  - Gompers,Paul A.
AU  - Lerner,Josh
TI  - What Drives Venture Capital Fundraising?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6906
PY  - 1999
Y2  - January 1999
UR  - http://www.nber.org/papers/w6906
L1  - http://www.nber.org/papers/w6906.pdf
N1  - Author contact info:
Paul Gompers
Harvard Business School
Baker Library 263
Soldiers Field
Boston, MA 02163
Tel: 617/495-6297
Fax: 617/496-8443
E-Mail: pgompers@hbs.edu

Josh Lerner
Harvard Business School
Rock Center 214
Boston, MA 02163
Tel: 617/495-6065
Fax: 617/496-7357
E-Mail: jlerner@hbs.edu
AB  - We examine the determinants of venture capital fundraising in the U.S. over the past twenty-five years.  We study industry aggregate, state-level, and firm-specific fundraising to determine if macroeconomic, regulatory, or performance factors affect venture capital activity. We find that shifts in demand for venture capital appear to have a positive and important impact on commitments to new venture capital funds. Commitments by taxable and tax-exempt investors seem equally sensitive to changes in capital gains tax rates that decreases in capital gains tax rates increase the demand for venture capital as more workers are incented to become entrepreneurs.  Aggregate and state level venture fundraising are positively affected by easing of pension investment restrictions as well as industrial and academic R&D expenditures. Fund performance and reputation also lead to greater fundraising by venture organizations.
ER  -