2024-12-02 using [structural interpretation of innovation gestation lags cld](https://claude.ai/chat/e0f7d884-10d7-4443-bac9-ccbbaf76d3f2) I asked whether VC's choice affect gestation lag and namrada said it was a nice question: short termism -> selective pressure Structural Interpretation of Gestation Lag Model | Component | Description | Key Limitations | |-----------|-------------|-----------------| | Model Framework | Poisson process with arrival rate 1/λj per technology | Assumes uniform arrival rates within technology class | | Key Input | Patent publication date as investment timing | May not align with actual investment start | | Measurement | Time to receive half of follow-on citations | Citations influenced by factors beyond innovation | | Estimation | Average lag across patents in technology class | Masks within-class heterogeneity | | Validation | Matches Mansfield surveys, case studies | Limited ground truth validation | | Selection | Patents that received citations | Misses failed attempts, non-patented innovation | | Aggregation | Technology class level averaging | Basic research averaged with incremental improvements | | Citation Issues | Follow-on citation patterns | Varies across fields independent of innovation speed | ![[FFE7E585-E5D1-4FBC-A54E-1AAD88669A13_1_105_c.jpeg|100]] namrada (harvard econ, advisor: josh lerner) gave a talk on "How Patient Is Venture Capital?": Venture capital is a major source of finance for innovation in the U.S. economy but how successful has it been in financing long-terminnovation? I evaluate the allocation of venture capital to technologies using a new technology-level measure of the expected time between investment and innovation. Using natural language processing, I assign innovation funding between 1980-2022 from the following sources to technologies: venture capital firms, public companies, two federal programs that target commercialization of innovation, and the top four federal agencies most important for government funding of innovation. Venture capital is disproportionately allocated to technologies with short lags between investment and innovation; this allocation resembles that by public companies and is shorter-term relative to the distribution of commercial value and scientific opportunities across technologies, as inferred from other sources of innovation funding. I show that the desire to raise followon funds earlier ("fundraising pressure") leads venture capital fund managers to invest in short-term innovation. it was a good opportunity to learn compare private, public, commercial value measures (from pitchbook, computstat).