New knowledge-based,enterprises have several characteristics that limit their options for obtaining financing from external sources: they have little or no collateral, their assets tend to be intangible, and the value of their innovations is hard to calculate. For these reasons, entrepreneurs in the more knowledge-intensive fields tend to rely largely on equity financing. This is a more “patient” form of,capital for early stage operations with returns linked directly to firm earnings. Using examples from various countries, this paper surveys the various mechanisms for risk financing and the complementary, yet constantly evolving, roles of business angels, venture capital firms, and government programs in such financing. Pre-publication Copy: Science and Public Policy Corresponding author: Center for International Science and Technology Policy, George Washington University, 1957 E Street, N.W., Suite 403, Washington, D.C. 20052, U.S.A. Tel: ,202-994-6458 Fax: ,202-994-1639