Our research investigates the flows of venture capital to technology-based companies to see if there is an optimum rate of investment. Venture capital investing in young, technology based companies is a risky undertaking fraught with uncertainty. To reduce agency costs associated with the trying to cope with the moral hazard, venture capitalists like to make their investment in stages so as to limit their downside risk if the company falters. Sahlman (1990) reasoned that staged investing is the venture capitalist most powerful control mechanism. Neher (1992) posited stage financing as an instrument to implement the optimal investment path. Bergmann and Hege (1997) developed a theoretical model to analyze the optimal financing of venture investment based on the interaction of learning and moral hazard when the rate of investment flow controls the speed at which the company develops.