Venture capital fuels innovation but sacrifices quality, boosts knowledge diffusion.
This study looked at how venture capital affects innovation in companies. The researchers found that venture capital funding can increase the amount of innovation happening in a company, but this might come at the cost of the quality of the innovations. Additionally, companies that receive venture capital tend to share their technical knowledge more widely. Lastly, companies in the same venture capital network tend to come up with similar innovations, especially if they are from different industries or locations.