For the past 20 years, the main driving force behind the steady flow of venture capital into early stage technology companies has been sound government policy. The success of the 20% investment tax credit incentive to first-time investors in venture funds (rewarded upon actual investment by venture funds in strategic high technology industries) and the clause restricting venture funds from investing in publicly traded securities are both examples of sound government planning, and have succeeded in stimulating capital flow to cash-strapped, expansion-stage technology companies.
By raising large amounts of capital and bringing it to bear on investment in high technology companies, venture funds have created an effective medium for putting idle cash to work in high technology industries. This infusion of capital investment is a blessing for many cash-starved technology startups, and is instrumental in the continued development of high technology industries. In the past 18 years, venture funds have successfully invested in over 300 foreign and domestic high technology companies which have since gone public.