The venture capital industry in the U.S. has important implications for the growth of “high tech”industries and the viability of the small firm sector. Venture capital is provided largely through independent firms, quasi-public Small Business Investment Corporations (SBICs) and corporate subsidiaries. The regional distribution of VC firms has changed over time but New York, Massachusetts, and California account for one-half of the current firms. An analysis of regional flows of VC investment reveals that California, Massachusetts and Texas were the leading recipient states while the Plains region receives the least amount of capital. Given the concentrations of VC activity, a regional mismatch in the supply of and demand for such funds may exist. The investment needs of small firms, the employment impacts of the VC industry, and the matching of VC supply and demand are seen as useful research directions.