The Money of Invention
| Author | Paul A. Gompers Josh Lerner |
|---|---|
| Language | English |
| Subject | Venture capital |
Publication date | 2001 |
| Publication place | United States |
The Money of Invention: How Venture Capital Creates New Wealth is a non-fiction book about venture capital, written by Paul A. Gompers and Josh Lerner, Professors of Business Administration at Harvard Business School. The book was first published in 2001 by the Harvard Business School Press. It is considered one of the best studies about the venture capital industry in United States.
Overview
The Money of Invention is a non-technical overview of the venture capital (VC), written for a general audience who wants to understand how VC industry works.[1][2]
The book is composed of three major sections. The first section focuses on the perspective of the
In the first section, the authors identify the challenges entrepreneurs face when trying to raise
In the second section, the authors focus on venture capital organizations. This section is part a historical account about the VC industry in United States, beginning with the founding of the first modern VC firm,
The third section of the book looks at efforts to apply the principles of venture investing in corporate, public sector, educational, and international settings. The authors argue that the lack of adequate compensation schemes and organizational structures usually limit the success of the venture capital model in these settings.
Reviews
Randall Morck, an academic in the field, says that the book is "accessible to undergraduates and MBAs with little economics and to the general reader", but recommends The Venture Capital Cycle (Paul Gompers and Josh Lerner 1999, Cambridge: MIT Press) from the same authors for a high-level academic treatment of the same issues. He further states that the book may be interesting to economists, explaining that "the familiar problems of agency cost, information asymmetry, adverse selection, and moral hazard assume overarching importance in the VC business." He praises the book for giving "clarifying to these problems", being useful to "counterweight the more traditional presentation of these issues".[2]
Reviewers also say that the authors "are strong supporters of the venture capital model", and hence "the reader is left with little doubt that the VC business has managed the trick at least tolerably well."
Publishing information
- Gompers, Paul A.; Lerner, Josh (2001). The Money of Invention: How Venture Capital Creates New Wealth. Cambridge: Harvard Business School Press. ISBN 1-57851-326-X.