A Study of Non-financial Roles of Venture Capitalists – An Indian Perspective

Abstract

The Indian VC industry is relatively younger, however, has been growing at a rapid pace. The last decade has seen some major investments being made, unicorns being built and few high returns exits. These are strong indicators of the Indian VC industry potentially maturing. This poses interesting as well as unique opportunities for academic research in venture capital from the Indian perspective that supplements an organized growth of the industry. This study focuses on the post-investment, non-financial roles that venture capitalists perform in their portfolio companies (especially when these represent early-stage, high-technology and high-growth companies), from the Indian perspective. The study takes into consideration the viewpoint of VCs corroborated by corresponding entrepreneurs. The study attempts to identify the non-financial roles performed by the VCs in India and qualitatively investigates how the roles are performed. The data was collected through in-depth personal interviews of partners of a heterogenous sample of the most active VC firms in India representing sector-agnostic as well as sector-focussed VC firms. Major findings of the study include empirical evidence on nuances of how VCs in India engage with the portfolio companies by the roles that they perform. The study adds to the body of literature on non-financial roles performed by VCs in portfolio companies by investigating the phenomenon from the Indian perspective.