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Economics, University of New Hampshire, D u r h a m , N H 03824, USA The role of private investors ill the equity financing of new technology-based ventures is examined. The research studies the venturc capital market from a demand and supply perspective and delineates the role of the private investor with that of the more visible venture capital funds. The entrepreneur's perceptions of raising venture capital arc also csaminecl. 'I'hc research suggests that the private investor is the most common source of seed and start-up financing, especially if the round of financing is less than US1$500 000. M'hile private investors are harder to find than thcir venturc capital fund counterparts, it appears to take less time to close a deal with private investors and the financing is less expensive than financing frorn venture capital funds. Both private investors and venture capital funds add value to thcir in\~estmcnts through the establishment of working relationships with the ventures they finance, and entrepreneurs perceive these working relationships to be a productive component of the deal.

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