Unlike standard bankers, venture capitalists provide capital, business leadership and experience to their companies. There are two types of startup companies they can invest in: innovators and imitators. Imitators follow a previous company's success, while an innovator tries to create a new market.

A recent study says that venture capitalists have different effects on these two styles of companies.

• An innovator has a 19 percent greater chance of obtaining venture capital overall, and in any given period of time innovators are 1.7 times more likely to obtain venture capital.

• Venture capitalists increase the likelihood of first product sale by a factor of 3.4 among innovator companies, but have an insignificant effect on imitator companies.

• The reason why venture capitalists have a greater effect on innovator companies is that imitators primarily utilize their capital, while innovators capitalize on both venture capitalist's business skills and capital.

Thus for innovators, venture capitalists play business leadership roles, while for imitators, they play financiers' roles.

Source: "Product Market and Financing Strategy," Economic Intuition, Winter 2000. Based on Thomas Hellmann and Manju Puri, "The Interaction between Product Market and Financing Strategy: the Role of Venture Capital," Working Paper.

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