*Asst. Professor, Centre for Management Studies, Jamia Millia Islamia University, Delhi
**Asst. Professor, School of Management Studies, National Institute of Technology, Calicut
***Research Scholar, School of Management Studies, National Institute of Technology, Calicut
Online published on 25 March, 2015.
In a developing country like India capital is considered to the paramount significance of rising of finance. In the case of new companies which are pertaining to innovative ideas finds it very difficult to see the light of day on account of scarcity of finance. Venture capitalists are acknowledged as a boon for the innovative entrepreneurs in India.
Though India had the history of 42 years of venture capital financing activities, the first 27 years (Pre-LPG Era) witnessed only the laying of foundation stone for the venture capital industry and the remaining 17 years (Post-LPG Era) actually made Indian venture capital industry to reach a significant level. Ever since economic liberalization which started in India in 1991, the government is going on opening up its economy to foreign investment, attracting global players to compete and utilize the large potential in the domestic market. The venture capital in India has emerged as an important investment arena only after liberalization.
The first decade of post reforms (1992–2001) of Indian venture capital has emphasized on SMEs and small and emerging technology oriented investments and entrepreneurial development. But so far the second decade is a decade of private equity, and an era of expansion and modernization and merger and acquisition. And instead of small deals, now the venture capitalists emphasis on big and less risky deals
The present research paper makes an earnest attempt to analyze the changing investment pattern of these two decadal phases on account of its stage wise investment as well as its average deal size. The first part of the paper discusses about the conceptual framework of venture capital and private equity, methodology, objectives and hypotheses of the study. The second part is about the decadal trend of venture capital and private equity in terms stages and deal size. The third part discusses about the reasons, impact, challenges and opportunities for both venture capital and private equity.
Venture Capital, Private Equity, LPG
