Appendix C: Access to Capital Framework A healthy capital system depends on a ready supply of capital from a variety of sources. This applies not only to founders raising from angel investors or early-stage funds, but also to venture capital fund managers raising from institutional limited partners. When capital is available through multiple channels—with differing mandates, timelines, and investment approaches—it enables better alignment, more competitive terms, and a stronger overall pipeline. Policymakers often equate access to capital with the existence of funding programs or the overall size of investment pools. But for founders and emerging fund managers, this view is too simplistic. Access is not a binary condition—it is a lived experience shaped by speed, sufficiency, and optionality. Capital that is slow to arrive, too limited in size, or restricted to a narrow group of providers may be technically “available,” but practically out of reach.
A more sophisticated understanding of access recognizes three interdependent dimensions:
● Supply of capital refers to whether enough capital is available at the right stage. For example, even with strong growth in venture capital, pre-seed and seed-stage capital pools often remain too small to sustain a healthy startup pipeline. ● Time to capital reflects how long it takes a founder (or fund manager) to raise funds. Prolonged diligence processes and slow-moving decision-making can disproportionately affect underrepresented or first-time founders (and emerging fund managers). ● Avenues to capital describe the diversity of viable funding sources available to founders. When those avenues are limited—concentrated in major urban hubs or among a homogenous investor base—it reinforces systemic inequities and restricts who gets funded, and on what terms. This lack of diversity can lead to power imbalances, where investors operate from an outsized bargaining position, imposing onerous deal terms or exercising outsized influence. It also increases the risk of founder-investor mismatch, where capital is deployed without adequate alignment on values, sector focus, or time horizon. Together, these dimensions shape whether capital is not only present but actually accessible. Policy interventions that increase the supply of capital without addressing these access dynamics may unintentionally reinforce existing gaps. Conversely, efforts to improve speed or broaden funding channels must be supported by sufficient scale. Broadening the availability of capital—at both the venture and fund level—is essential to building a resilient and responsive innovation economy.
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