Sectoral analysis for risk assessment in venture capital financing : a comparative case analysis of India and the United Kingdom | |
| Author | Thanumoorthy, Vinoj |
| Call Number | AIT RSPR no.SM-98-79 |
| Subject(s) | Venture capital--India Venture capital--Great Britain Risk assessment--India Risk assessment--Great Britain |
| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration. School of Management |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no. SM-98-79 |
| Abstract | In the decision making process Venture Capital Firms put utmost importance to risk assessment of project. In this study, risks are categorized as Promoter risk, Product risk, Technological risk, Market risk, Financial risk, organizational risk, strategy risk and Environmental risk. The sectors considered for study were the computer software and the chemical industry sector. It was found that integrity/honesty of the management team, expected rate of return and market growth rate were considered essential criteria in both sectors. In the computer software sector, application development and risks associated with availability of skilled manpower were considered essential. In the chemical industry sector, risks associated with manufacturing complexities, logistics and pollution were considered essential. VCFs in UK and India followed the same methodology for risk assessment. However, the technological risks and environmental risks were given more significance by VCFs in UK. VCFs in India have to improve their methods of evaluating technological risks for investments in the hi-tech sector. They should invest in projects that have very novel idea but long gestation periods. It is recommended that venture capitalists should take up projects which have creative ideas and are in a nascent stage. They should not seek control over the management after putting their money in the venture. They should take efforts to form a strong venture capital association like the BVCA in UK. VCFs in India should also try to promote informal venture capital activity in India. |
| Year | 1998 |
| Corresponding Series Added Entry | Asian Institute of Technology. Research studies project report ; no. SM-98-79 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Gupta, J.P. |
| Examination Committee(s) | Paul, H. ; Pandey, I.M. |
| Scholarship Donor(s) | ADB-Japan |
| Degree | Research Studies Project Report (M. Sc.) - Asian Institute of Technology, 1998 |