| Venture capital finance is instrumental in inducing | | | | financing bodies, fiscal authorities, regulatory bodies |
| technological development, stimulating creativity and | | | | and others understand the concept and relevance of |
| innovation and nurturing entrepreneurship. Concerted | | | | venture capital. It should be appreciated that venture |
| efforts are required by financial institutions, private | | | | capital is an instrument for strengthening |
| sectors and other agencies to create a conducive | | | | entrepreneurial forces in the economy; a device for |
| environment for the growth of venture capital. In | | | | inducing risk taking and a mechanism for promoting a |
| particular, initiatives are required to widen the | | | | closer investor/investee relationship. Those who |
| perspective of venture capital finance and create a | | | | participate in venture capital arrangements must |
| favorable fiscal and regulatory environment. | | | | overcome certain traditional psychological barriers and |
| The venture capital schemes of the term-lending | | | | be willing to build a relationship of genuine partnership |
| financial institutions presently focus mainly on | | | | and not a perfunctory association of limited |
| supporting development of technology and | | | | involvement. |
| implementing indigenously developed yet untested | | | | To nurture the growth of venture capital, a favorable |
| technologies. While this concern is understandable | | | | fiscal and regulatory environment should be created. |
| because of a genuine need for expanding the base | | | | Some of the specific things that may be are |
| of viable indigenous technology, it leads to a | | | | investors subscribing to the capital of venture capital |
| somewhat limited view of venture capital. What is | | | | funds may be given greater tax reliefs, and the |
| required is a broader perspective on venture capital | | | | long-term capital gains of the venture capital funds |
| so that it is viewed as an instrument for financing a | | | | may be taxed at a concessional rate or even |
| wide range of projects that essentially have a "high | | | | exempted totally from taxation. Orderly and efficient |
| risk- high-return" profile. | | | | mechanisms must be evolved to facilitate liquidation |
| In this context, it is important that entrepreneurs, | | | | of investments of venture capital funds. |