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Small Business Economics

, Volume 19, Issue 1, pp 13–29 | Cite as

Internationalization of Western Venture Capitalists into Emerging Markets: Risk Assessment and Information in India

  • Mike Wright
  • Andy Lockett
  • Sarika Pruthi
Article

Abstract

This paper provides the first analysis of the internationalization of venture capital firms through an examination of risk assessment and information usage by firms in India. Personal interviews were conducted with executives in 31 (84%) of the active venture capital firms. The paper extends previous research by comparing perceptions of the behavior of domestic venture capital firms in India, foreign (primarily U.S.) venture capital firms in India and U.S. venture capital firms in their domestic markets. Foreign firms in India place significantly greater emphasis on product market factors and accountants' reports than domestic firms in India. They place significantly less emphasis on financial contributions of management in assessing risk and own due diligence and information from entrepreneurs than do U.S. firms in their domestic market. They make more use of information from trade publications and relating to production capacity and technology and information from accountants' reports than do domestic venture capital firms in India. The evidence is consistent with venture capital firms adapting to local market conditions rather than implementing "recipes" from their domestic markets.

Keywords

Risk Assessment Domestic Market Foreign Firm Personal Interview Domestic Firm 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Kluwer Academic Publishers 2002

Authors and Affiliations

  • Mike Wright
    • 1
  • Andy Lockett
    • 1
  • Sarika Pruthi
    • 1
  1. 1.Centre for Management Buy-out Research, Nottingham University Business SchoolUniversity of NottinghamNottinghamUnited Kingdom

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