Trends in Venture Capital Finance in Developing Countries

This paper presents an analysis of new data on venture capital in developing countries gathered from two main sources: i) regional venture capital associations in Asia and Europe, and ii) a survey administered by IFC on the portfolio structure of some 410 investments made by 53 venture capital funds in 19 developing countries. The data from the regional venture capital associations details sources and uses of venture financing flows by region, country, industry, type of investing institution, and stage of venture investment. The survey data details fund organization, deal screening, capital structure, agency cost characteristics of asset structure, measures of entrepreneur human capital, and investment monitoring and control. The paper identifies several factors critical to venture fund investment performance and the organizational structures with which they are associated