Venture Capital Led Entrepreneurship in Health Care, ,This chapter is a preliminary draft unless otherwise noted. It may not have been subjected to the formal review process of the NBER. This page will be updated as the chapter is revised.
Chapter in forthcoming NBER book The Role of Innovation and Entrepreneurship in Economic Growth, Aaron Chatterji, Josh Lerner, Scott Stern, and Michael J. Andrews, editors We provide a detailed picture of early-stage innovation in healthcare as measured by the investment decisions of venture capitalists (VCs), whose investment decisions profoundly shape the quality of patient care. Among VC investments, 60% of all money was invested in firms working on drugs, another 20% was invested in firms working on a project related to medical devices, and 20% was given to firms working on health care delivery. We also find enormous geographic concentration of healthcare deals which motivates us to explore the ‘valley of death’ hypothesis (the idea that many useful inventions are not explored because VCs may not know about them), and find some preliminary support for this hypothesis. This paper is available as PDF (1298 K) or via email
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