Abstract
The effects of venture capital (VC) funding on the long-term success and development of new businesses are the focus of this research. Despite extensive study on the topic, there is a lack of conclusive proof that venture capital investments affect business success and market value. This study applies the notions of signaling theory and information asymmetry to venture capital investment and its effects on business at different growth stages. It concludes that early-stage VC investment positively correlates with success and growth for businesses. The study examines 363 companies and finds that enterprises receiving early-stage venture capital investment perform better and more consistently over time. Interestingly, potential absorptive capacity moderates this effect favorably, whereas realized absorptive capacity does not. Furthermore, the study uses data from 2023 to analyze variations in cumulative venture capital investment across the IT, telecom, media/entertainment, and service industries in India. Venture capital firms can take advantage of the ongoing difficulty new businesses face in securing the funding needed to implement their ideas. To promote the expansion of knowledge-based businesses worldwide, these firms offer crucial managerial and financial support while leveraging technical and financial expertise to encourage industrial development and tap into previously unrealized potential.
Keywords
Venture Capital, Economical Success, Early-Stage Investment, Absorptive Capacity, Industry-Specific Investments and Financial Growth.
Citations
IRE Journals:
CMA Mayank Bajpai , CMA Niraj Prasad , Prof. Dr. Audhesh Tripathi
"A Study on Fostering Financial Growth of Business and Role of Venture Capital" Iconic Research And Engineering Journals Volume 8 Issue 3 2024 Page 616-627
IEEE:
CMA Mayank Bajpai , CMA Niraj Prasad , Prof. Dr. Audhesh Tripathi
"A Study on Fostering Financial Growth of Business and Role of Venture Capital" Iconic Research And Engineering Journals, 8(3)
About IRE Journals
IRE Journals is an open access online journals established with an aim to publish high quality of research work in various diciplines. We have more than 6 years in publications. Over 2500+ papers already published.
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