How exactly does venture capital influence a states economy?
These firms generate money in annual fee income which goes directly into the states economy in the form of payroll for the firms employees, rent, and a large variety of service fees paid to the lawyers, accountants, and other professionals who support these firms. In addition, the managers of these firms will pay the state taxes on capital gains generated. Venture capital investments create jobsgreat jobs. On average, 75% of venture capital investment is spent on payroll, and venture capitalists generally estimate compensation per-employee at their portfolio companies to be $100,000 per year. Consequently, each $1 million of venture capital directly creates or sustains seven and one-half skilled, high-paying jobs.
