As financial investors in portfolio companies, venture capital (VC) firms are expected to add value through continuous monitoring and sustained involvement. Such an effort is expected to give VC-backed IPO firms (VC IPOs) an edge over those IPO firms not backed by VCs. We examine such value additions use a comparative analysis of operating and stock performance data of VC IPOs against three groups of non-VC POs. We identified a set of 92 VC IPOs and 182 non VC IPOs. The 182 non-VC IPOs were further subdivided into industry and size groups. While Wilcoxon tests were used to compare the medians of operating and stock performance, panel data regression models were used to establish the impact of VC on those differential performances. We find that the medians of VC IPOs on most operating performance parameters are better than non-VC IPO groups. But the relational tests could not attribute the better performance to VC influence. We conclude that this could be indicative of VCs’ superior ability to identify promising ventures and push them toward their maximum potential. This study is one of the pioneering efforts in exploring VC value creation in the Indian context. We also extend the capital market research in accounting to a VC context.

A city can support ventures… and should, because ventures return the favor in ways you might not expect. This article shows how the presence of venture can energize the hosting city, leading to a virtuous symbiotic equilibrium. It uses as a case study the South Indian city of Chennai, founded in 1639, which is one of the thriving metropolitan cities of India today. After introducing us to Chennai and to the role of large ('Tier 1') cities in the world of venture in India, the authors proceed to show the impact of ventures in two domains: reinforcing the economic fabric of the city, and reinforcing its social fabric. Chennai is a center of four economic sectors: Healthcare, Automobiles, Movie and Music, and Information Technology. Ventures are playing a key role in sustaining the leadership position of the city in these sectors. They have augmented existing capacity, pushed forward the industry frontiers, introduced new processes to bring about greater efficiency, and facilitated a change in mindset by breaking new ground. Meanwhile they also play a role in the social sector through their ability to achieve depth impact, offer niche services that public agencies themselves are unable to provide, and design technology driven solutions to enhance the delivery of civic services. The article provides numerous examples from diverse domains, all demonstrating this symbiosis between the city and its ventures. If you thought that the only effect of ventures was in the jobs and profits they created, read this article and think again!

This article is concerned with the main government policies in equity financing and capital market funding to support entrepreneurial development in Asia. In particular, the author undertakes a comparative case study analysis of four Asian countries: Thailand, Malaysia, Singapore, and Taiwan. The study finds that the government intervention model is successful in Singapore and Taiwan. Although Singapore and Taiwan have clearly defined agencies responsible for carrying out policy implementation, Malaysia and Thailand suffer from having redundant organizations/agencies competing on offering similar innovation financing schemes. The study offers effective innovation financing policy recommendations to support the national economic and social development. The proposed policies can be integrated into national strategies to strengthen the innovation system of the Asian countries.

The venture capital and private equity (VCPE) industry in India has grown significantly in recent years. During five‐year period 2004‐2008, the industry growth rate in India was the fastest globally and it rose to occupy the number three slot worldwide in terms of quantum of investments. However, academic research on the Indian VCPE industry has been limited. This paper seeks to fill the gap in research on the recent trends in the Indian VCPE industry. Studies on the VCPE transactions have traditionally focused on one of the components of the investment lifecycle, i.e. investments, monitoring, or exit. This study is based on analyzing the investment life cycle in its entirety, from the time of investment by the VCPE fund till the time of exit. The analysis was based on a total of 1,912 VCPE transactions involving 1,503 firms during the years 2004‐2008. Most VCPE investments were in late stage financing and took place many years after the incorporation of the investee firm. The industry was also characterized by the short duration of the investments. The type of exit was well predicted by the type of industry, financing stage, region of investment, and type of VCPE fund. This paper highlights some of the key areas to ensure sustainable growth of the industry. Early stage funding opportunities should be increased to ensure that there is a strong pipeline of investment opportunities for late stage investors. VCPE investments should be seen as long‐term investments and not as 'quick flips'. To achieve this, it is important to have a strong domestic VCPE industry which can stay invested in the portfolio company for a longer term.

Incubation centers have emerged as an important source of finance and support for new and nascent companies. In line with the worldwide trend, there has been a substantial increase in the number of incubation centers in India during the past 10 years. Using data from 159 incubators and a sample of 1,058 incubatees from 40 incubators, this article provides an analysis of the trends in incubation support in India. Universities play an important role in providing incubation support—67% of the incubators were based in universities. Not only are there more incubators functioning in universities, but they have also been functioning for longer. In addition, 57% of the incubators were in private organizations, and 43% were in public sector organizations. There are interesting variations between incubation support and venture capital and private equity (VCPE) investment in India. Most of the VCPE investments in India are seen in metro cities, whereas in the incubation, most of the incubation centers and incubatees are located in non-metro cities. VCPE investments are largely driven by the private sector, whereas the public sector plays an important role in incubation support and financing. Private sector incubators are more effective than public sector incubators, as measured by the activity indicator and graduation ratio.