Venture capital as a source of financing high technology, small and medium enterprises (SMEs) is well established in the developed economies. Now, thisactivity is becoming a focus of attention in emerging markets. India has registered a significant growth in terms of the amount and number of venture capital funds. But there is no academic research to date, devoted to understanding how this new investor class behave through the investment cycle. This research is the first-ever investigation of how venture capitalists in India conduct the Valuation, Structuring and Monitoring of their investments. Afterintroduction, the thesis presents an overview of the Indian economy, followed byits financial landscape. The third chapter covers a survey of the economiccontribution that SMEs make and the funding problems they face, together with areview of the Indian venture capital sector.An extensive literature review on venture capital research follows. After findingthe research gaps, a theoretical framework, based on the adverse selection,moral hazard, corporate governance, and the asymmetric information thatcharacterises the risk capital market is used. Eight hypotheses are developed totest how venture capitalists address the adverse selection through (a) a variety ofinformation sources used in preparing the valuation memorandum, and (b)applying various quantitative and qualitative methods to determine the realisticvalue. How do they address moral hazard by (a) using covenants in their dealstructures, and (b) what financial products are used to minimise the risk? Finally,how frequently and extensively do they monitor their investee companies toovercome the information asymmetry and corporate governance problems?Data from 40 of the most active 42 venture capitalists operating in India weregathered. Then, the data were analysed using Chi Square, Cluster Analysis,ANOVA and Logistical Regression.The results present a descriptive profile of the Indian venture capital sector,including the characteristics of the fund management teams, the sectors andstages of investments and the tests of the hypotheses. This is followed bymethodical statistical analysis by splitting the sample based on sevendemographic characteristics. The final chapter includes the conclusion,recommendations and the implications of this research for the venture capitalists,entrepreneurs and regulators. Finally, future research areas are suggested thatmay further improve the understanding of the venture capital market in India.