Changes of Venture Capital Financing in the USA and in Europe (Zmiany w finansowaniu kapitalem venture w USA i Europie)

In this article, the author discusses the problem of financing innovation, especially disruptive (or breakthrough) innovation. This type of innovation has some special features that make it different from incremental innovation. First of all, disruptive innovations are the ones that have great growth-creating potential. They are new products or services that replace the existing ones. They break the present production cycle, cause risk and uncertainty, and provoke entrepreneurs’ risk-averse behavior. Because if profits motivate entrepreneurship, uncertainty demotivates it. High uncertainty, high capital intensity and high profit prospects make investing in this sort of innovation a??potentially interesting issue. There is a common perception that venture capital (VC) has become an intermediary in financial markets, providing capital to firms that might otherwise have difficulty attracting financing. As these firms are thought to be small, young and innovative, plagued by the “liability of newness”, venture capital is expected to fulfill an important role in the economy – it is meant to be a tool of financing novel and risky ventures and, hence, it is a??driver of technological and economic progress. The goal of the article is an attempt to answer the question if venture capital is risk-loving or risk-averse capital. The methods used include a??critical analysis of literature and data analysis. The goal of the article is to show the role VC plays in financing Europe’s innovations, and to answer the question if VC is risk-loving capital.