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1 results

  • 6 - Silicon Valley

  • from The Second Era
  • Seth C. Oranburg, Duquesne University, Pittsburgh
  • Book:
    A History of Financial Technology and Regulation
    Published online:
    24 March 2022
    Print publication:
    31 March 2022, pp 67-84

  • Summary

    With the birth of Silicon Valley came the rise of the private equity market and venture capitalists. This Chapter explores the transformation of capital securing ventures as startups shifted their focus from public stock markets toward private investment opporutnity that were only available to the already rich and well connected. These wealthy investors helped startups survive the treacherous “seed valley of death” on their way to an eventual “initial public offering” (IPO). Venture Capital investors (VCs) and Angel Investors generally fund early-stage projects, although large venture capital investor firms will continue to fund projects throughout the start-up financing lifecycle. This Chapter discusses the requirements and considerations of these crucial players, and the controversial incentive structure this system creates as more companies are indirectly encouraged to stay private. Thus, spawning a new breed of the large private company and the decline of the IPO.