Abstract

The emergence of venture capital companies is a relatively new phenomenon in India. In the absence of an organised venture capital industry in India until 1998, individual investors and development financial institutions have played the role of venture capitalists. Entrepreneurs have largely depended on private placements, public offerings and lending by financial institutions. The venture capital phenomenon has now reached a take-off stage in India. Risk capital in all forms is becoming available more freely. Contrary to the earlier trend, where it was easy to raise only growth capital, financing of ideas or seed capital is now available. The number of players offering growth capital and the number of investors is rising rapidly. The initiatives of the Indian government in formulating policies regarding sweat equity, stock options and tax breaks for venture capital along with overseas listings have all contributed to the enthusiasm among investors and entrepreneurs.

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