Trigger Warning

As you watch the chaos swirling around a bank run, have you been triggered? It’s easy to capitulate to gloomy forecasts on the VC industry in general. I want to remind all of you that VC industry is a robust national treasure. Like the entrepreneurs it serves, the VC industry is not fragile to brittle, and will continue to drive long-term macroeconomic growth in the U.S.

Feeling a little rattled today? Take heart. Think about two facts on the long-term health of our venture economy:

1 – Venture capital-backed companies account for 41% of total US market capitalization and 62% of US public companies’ R&D spending.

2 – Among public companies founded within the last fifty years, VC-backed companies account for half in number, three quarters by value, and more than 92% of R&D spending and patent value. Yes, you read correctly, over 90% of R&D spending comes from VC-backed companies.

America’s venture capital industry is one of our country’s greatest economic assets. Looking at total funding and funding per capita, it’s clear that America is the global leader in the industry. While deeply shocking, one bank failure does not indicate systemic weakness or decline. I hope recent events will solidify our resolve to remain at the forefront of the global VC industry.

Thanks to Will Gornall (Sauder School of Business) and Ilya A. Strebulaev (GSB, Stanford) for their research reminding us of the remarkable economic impact of venture capital.