PRINT THIS PAGE Venture capital firm internationalization and monitoring investees: the case of India09/09/2002. Source: Centre for Management Buy-out Research, Nottingham University Business School, University of Notting. Mike Wright, Sarika Pruthi, Andy Lockett
In this exploratory paper Mike Wright, Sarika Pruthi and Andy Lockett at the Centre for Management Buy-Out Research look at the differences between foreign and domestic venture capital firms in India, and find that they have different ways of adding value to the high-tech firms they are funding.
The venture capital industry in India has witnessed a rapid increase in activity over recent years. Much of this venture capital activity has developed to fund the entrepreneurial growth of new high technology businesses. Foreign venture capital firms have significantly different ways of monitoring their investee firms from the methods used by domestic firms, according to the authors' findings.
They found that foreign venture capital firms have significantly less operational and informal level involvement in some areas than domestic firms. Moreover, foreign venture capital firm parents tend to set policy after discussion with the local subsidiary. Wright et al suggest that it may be beneficial for foreign firms to try different approaches to monitoring their investments, depending on the different markets they are seeking to operate in.
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This is a CMBOR Occasional Paper, sponsored by Barclays Private Equity and Deloitte & Touche. Occasional Papers are available from margaret.burdett@nottingham.ac.uk, tel: +44 (0)115 951 5493
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