Investigating the Effect of Venture Capital Funding on Profitability of Knowledge-Based Enterprises

Knowledge-based activities carry a high risk. Moreover, financing the companies which do the likewise activities for supporting and encouraging innovative plans and advanced technology is of high importance. Therefore, nowadays, financing methods by risk taking funds is considered the most prominent and effective financing method in knowledge-based companies all over the world. The purpose behind doing this research is to investigate the influence of venture capital funding on profits of knowledge-based companies located in the Science and Technology (Elm-o-fannavari) park in East Azerbaijan province of Iran. The data for this research has been collected with the help of questionnaires from knowledge-based companies and the data analyses have been done with the panel data method and STATA software. Based on the final results, the two variables of venture capital fund facility and the size of the company have a meaningful and positive effect on profit of company. While influence of loans from business banks, company's age (company's life’s year) and human asset, on the company profitability is not meaningful. R&D costs have a negative effect on profitability, but given that this variable is not immediately effective and its effect appears with time lags, also given the short period of this study, this result is not far from waiting.