Growth and future of venture capital in India

Over the Past five decades, venture capital has made significant contribution to technological innovations and promotion of entrepreneurship. Many of the path-breaking technologies have emerged from small businesses. Venture capital funds are used primarily for companies who may not have sufficient operating history to qualify for traditional loans through a bank. Most start-up high technology companies have used venture capital funds in order to get started. In most cases, these companies are required to provide the venture capital company with a form of profit sharing by providing the venture capital firm equity in the company. Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. Despite the scepticism, the data clearly reflects that venture capital funds, while being more cautious, continue to be very active and interested in India. This paper is an attempt to understand concept of venture capital and growth and future of venture capital in India.