The intrinsic mechanism of leveraging innovation capability via venture capital

In this paper, we have studied the influence of venture capital on leveraging innovation capabilities. Based on the literature review and practical materials, three functions of VC in leveraging innovation capabilities are extracted. Firstly, VC can provide financial support to enterprises, especially the small and medium enterprises that are lacking of money to invest in innovation activities. Secondly, the role of venture capital is embodied in providing management support. Thirdly, VC can bring the backed-enterprises into the industry network, which may generate opportunities to discover valuable information. Then, VC in Silicon Valley is taken as an example to demonstrate the importance of VC in promoting Silicon Valley´s innovation.