Besides cold, hard cash, identifying the advantages that a venture capital firm brings to the ranks of a burgeoning company is complicated business, especially since many of the companies funded in such a manner do not become successful. However, a recent survey conducted by the U.S. government found that more than two-thirds of benefiting executives in technical and business management tiers perceived VC firms to have added value to their enterprise.

Common Venture Capital Benefits 

Among the most common advantages brought to the table by VC firms are: an ability to introduce the company to the investment community at-large and help secure further rounds of funding; identifying new directions for the business and manufactured products or processes; and the development of various business growth strategies, from potential merger and acquisition moves to corporate exit strategies.

Critical Component in a Capitalist Economy 

On a larger scale, venture capital funds are a critical component of capitalist economies. Initially set up at a range of anywhere from $10 to $350 million, these limited partnerships, limited liability companies or limited liability partnerships allow individual investors to funnel their money to the market economy through the intermediary of an experienced management team.

Bigger Risk Takers 

Another way to look at VC firms is to think of them as banks that take much bigger risks. Without these high-cash level entrepreneurial funding sources, many of Silicon Valley's greatest success stories would never have been possible. However, it will likely be some time before the U.S. VC capital horizon sees another year like 2007, during which more than $7 billion in venture capital was invested for all four quarters of the year.

Bridging the Start Up Gap 

But even in a down year like 2009, venture capital firms provide an essential lifeblood for both early stage (less than 24 months in existence) and later stage companies. A recent U.S. bank study found that more than three-quarters of U.S. new business failures were because those businesses had not raised a sufficient amount of start-up capital.  VC firms bridge that gap, typically providing the kind of robust funding that is necessary to sustain a company to profitability.

At the same time, many of the most successful VC-backed firms are of an infrastructure rather than consumer nature. For example, a recent list of the ten biggest U.S. venture capital success stories of all-time lists Facebook and MetroPCS Communications with more obscure companies such as Reliant Pharmaceuticals, Solyndra and Clearwire.