Volume: 3, Issue: 1
INTRODUCTION
Venture Capital (VC) a financial innovation of the twentieth century is a long term illiquid investment that can be in the form of equity, quasi-equity and some times debt in new and high risk ventures. It has required better recognition after the famous legend of Apple computers and has captured people's imagination through blockbuster successes like Intel, Hewlett-Packardand Microsoft etc. Eventually, the success ofVC stimulated global countries to enter the arena of VC. Venture capital refers to capital investment made in a business or industrial enterprise that carries elements of risk, insecurity and probability of business hazards. Capital investment may assume the form of either equity or debt or both i.e., entail total loss or be so insignificant as to lead to high gains. However, venture capital finance is different from conventional finance i.e., money lending and bank finance. However venture investments are taking place in venture capital because of the High Returns and Diversifications in investments. Not only that, when venture capital returns are compared to other asset classes. venture capital returns have a desirable low correlation with the returns in other asset classes. The high expected return and the low correlation with other asset classes suggest that an appropriate investment in venture capital class can lead to a higher risk adjusted rate ofrctum for well-diversified portfolio.
