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Innovation leads to economic growth, however, financing innovation comes with major uncertainties and therefore there is a risk of underinvestment in innovation. One type of investor who is prepared to take on this uncertainty is the Venture Capitalist (VC). The question remaining is whether VCs spur further innovation or mainly exploit existing innovation. By counting the patent registrations in 133 Swedish VC financed firms and comparing these to 609 control firms, the difference in innovation level is assessed. The result indicate that VC financed firms, on average, become 23% more innovative after receiving financing from a VC. Thus, it is concluded that VCs spur innovation in the Swedish context.