Capitalizing on Rural Communities. Emerging Development Venture Capital Funds in Appalachia

摘要

Both rural and metropolitan regions throughout America have increasingly begun to launch Development Venture Capital (DVC) funds to attract new sources of equity financing to underserved communities. In the 13-state Appalachian Region, several new funds are being created, and the Appalachian Regional Commission has taken an active role in a regionwide effort to support these funds. Like traditional venture capital funds, DVCs seek a strong return on investments; but unlike most traditional funds, they also seek to provide social benefits to the communities in which investments are made. In many cases, DVC funds are helping to make local economies stronger so that they can attract traditional venture capital investment. The Appalachian Regional Commission considers the establishment of new DVC funds a critical component of its three-year Entrepreneurial Initiative, which is creating more than 1,000 new businesses and fostering a culture of entrepreneurship throughout the Region. For many of Appalachias poorer communities, and for underserved communities throughout the nation, DVC funds may be the only way they can share in the enormous increase of venture capital investment in the United States. In 1999, venture capital funds invested $35.6 billion domestically, far exceeding the $14 billion invested in 1998. How is the Appalachian Region faring as a participant in this tremendous explosion of venture investment. And what role can DVC funds play in helping rural communities take advantage of this unprecedented availability of investment capital. This publication explores these questions, provides a review of new development funds being created within the Region, and presents a range of resources for those interested in the new field of development venture capital.