The Rise and Fall of South African Venture Capital : A Coproduction Perspective

An exploratory longitudinal case study of the South African venture capital (VC) industry is used to evaluate two perspectives on the VC emergence process. The first views VC emergence as the resolution of the simultaneity problem. We propose a second perspective, which sees emergence as the product of a teleological process involving coproduction between private sector fund managers and public sector investors. We develop process data from four sources: Semi-structured interviews with current and past VC practitioners in South Africa, archival research at fund managers and newspapers, direct observation, and a review of relevant research. Our analysis shows the centrality of coproduction to the industry's emergence. These results suggest an alternative to the simultaneity model for explaining VC industry emergence in weak institutional environments