Roundtable on Value Creation from Venture Capital and Private Equity Investments: The Indian Context

Abstract

This article is based on a roundtable discussion of how venture capital and private equity investments create value for their portfolio companies. Value creation happens in all three stages of investment process—identification, investment, and monitoring. In the Indian context, high levels of investor involvement in the investee companies play a significant role in value creation. In some instances, venture investors give credibility to not just the investee company but to the sector as whole. Venture investors have de-risked IPO investments by reducing both immature business models and fly-by-night operators. Over the years, interesting investment models such as “Entrepreneur in Residence,” shareholding in exchange for incubation, and mentoring services have evolved.

TOPICS: Private equity, emerging, portfolio construction