Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance
This paper discusses the constraints for private equity financing of small and medium enterprises in developing economies. In addition to capital, private equity investors bring knowledge and expertise to the companies in which they invest. Throug...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/04/19327172/private-equity-venture-capital-smes-developing-countries-role-technical-assistance http://hdl.handle.net/10986/17714 |
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okr-10986-17714 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ACCESS TO CAPITAL ACCESS TO INFORMATION ACCESS TO MARKETS ACCOUNTING ACCOUNTS RECEIVABLE ADVANCED ECONOMIES ADVISORY SERVICE AFFORDABILITY ALTERNATIVE ASSET ALTERNATIVE INVESTMENTS AMOUNT OF CAPITAL ANGEL INVESTOR ANGEL INVESTORS ASSET CLASS ASSET CLASSES BANK FINANCING BENEFICIARY BUDGETING BUSINESS ADVISORS BUSINESS ADVISORY BUSINESS OPPORTUNITY BUSINESS OWNERS BUSINESS PLAN BUSINESS STRATEGY BUSINESS SUCCESS BUSINESS TRAINING CAPACITY BUILDING CAPACITY CONSTRAINT CAPACITY CONSTRAINTS CAPITAL FLOWS CAPITAL FUND CAPITAL INVESTMENTS CAPITAL MARKETS CAPITAL STRUCTURE CAPITAL · · · · FUND CASH FLOW CASH FLOWS CENTRAL BANK CONFLICTS OF INTERESTS CORPORATE DEBT CREDIT GAP CREDITS CUSTOMER BASE DEBT FINANCING DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK DEVELOPMENT CORPORATION DEVELOPMENT FINANCE DEVELOPMENT FINANCE INSTITUTION DEVELOPMENT FINANCE INSTITUTIONS DISBURSEMENT DUE DILIGENCE ECONOMIC DEVELOPMENT ECONOMIES OF SCALE EMERGING MARKET EMERGING MARKETS ENDOWMENTS ENTERPRISE ASSISTANCE ENTREPRENEURS EQUIPMENT EQUITY CAPITAL EQUITY FINANCING EQUITY FUNDS EQUITY INVESTMENT EQUITY INVESTMENTS EQUITY INVESTORS ESCROW ESCROW ACCOUNT EXIT MECHANISMS EXPENDITURES EXTERNAL CAPITAL FINANCES FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INVESTORS FINANCIAL LITERACY FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL RESOURCES FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SUPPORT FINANCIAL SYSTEMS FLOW OF INVESTMENT FUND MANAGEMENT FUND MANAGER FUND MANAGERS FUNDING SOURCES GRACE PERIOD GREEN REVOLUTION GROSS DOMESTIC PRODUCT GROUP OF FIRMS HOLDING HUMAN CAPITAL HUMAN DEVELOPMENT INFORMATION TECHNOLOGY INITIAL PUBLIC OFFERING INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTERNAL RATE OF RETURN INTERNAL RATES OF RETURN INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INVENTORY INVESTING INVESTMENT ACTIVITIES INVESTMENT BANK INVESTMENT BANKS INVESTMENT CAPITAL INVESTMENT CORPORATION INVESTMENT FUND INVESTMENT FUNDS INVESTMENT OPPORTUNITIES INVESTMENT PERIOD INVESTMENT PORTFOLIO INVESTMENT PROCESS INVESTMENT PROPOSALS INVESTMENT RISKS INVESTMENT STRATEGY INVESTOR INTEREST INVESTOR RELATIONS IPO JOB CREATION LEGAL ENVIRONMENT LEGAL SYSTEMS LENDER LEVEL OF RISK LOAN LOCAL INVESTORS LONG-TERM DEBT LONG-TERM FINANCE LONG-TERM INVESTOR LONG-TERM RESOURCES MARKET DEVELOPMENT MARKET ENVIRONMENT MARKET PLAYERS MARKET REGULATORS MARKET RETURNS MATURITY MICRO-ENTERPRISE MICRO-INSURANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MINORITY SHAREHOLDER MINORITY SHAREHOLDER RIGHTS MONETARY FUND NEW COMPANIES NEW MARKET NEW MARKETS OPERATING COSTS OWNERSHIP STRUCTURE PENSION PENSION FUNDS PERSONAL SAVINGS POLITICAL RISK POOL OF FUNDS POOLS OF CAPITAL PORTFOLIO PORTFOLIO MANAGEMENT PORTFOLIOS POTENTIAL INVESTMENT PRIVATE BANKS PRIVATE CAPITAL PRIVATE EQUITY PRIVATE EQUITY FINANCE PRIVATE FUND PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR FINANCE PRODUCTIVE INVESTMENT PROFESSIONAL INVESTORS PROFESSIONAL QUALIFICATIONS REAL ESTATE RETURNS RISK CAPITAL RISK MANAGEMENT RISK PROFILES SECURITIES SEPARATE ASSET SEPARATE ASSET CLASS SHAREHOLDERS SMALL ENTERPRISE SOCIAL DEVELOPMENTS START-UP START-UP CAPITAL START-UP COSTS SUBORDINATED DEBT SUPPLY CHAINS TECHNICAL ASSISTANCE TECHNICAL SUPPORT TRADE CREDIT TRANSACTION TRANSACTION COSTS TRANSPARENCY TRUST FUND TYPE OF INVESTOR UNION VALUATION VENTURE CAPITAL VENTURE CAPITAL FUND WORKING CAPITAL |
| spellingShingle |
ACCESS TO CAPITAL ACCESS TO INFORMATION ACCESS TO MARKETS ACCOUNTING ACCOUNTS RECEIVABLE ADVANCED ECONOMIES ADVISORY SERVICE AFFORDABILITY ALTERNATIVE ASSET ALTERNATIVE INVESTMENTS AMOUNT OF CAPITAL ANGEL INVESTOR ANGEL INVESTORS ASSET CLASS ASSET CLASSES BANK FINANCING BENEFICIARY BUDGETING BUSINESS ADVISORS BUSINESS ADVISORY BUSINESS OPPORTUNITY BUSINESS OWNERS BUSINESS PLAN BUSINESS STRATEGY BUSINESS SUCCESS BUSINESS TRAINING CAPACITY BUILDING CAPACITY CONSTRAINT CAPACITY CONSTRAINTS CAPITAL FLOWS CAPITAL FUND CAPITAL INVESTMENTS CAPITAL MARKETS CAPITAL STRUCTURE CAPITAL · · · · FUND CASH FLOW CASH FLOWS CENTRAL BANK CONFLICTS OF INTERESTS CORPORATE DEBT CREDIT GAP CREDITS CUSTOMER BASE DEBT FINANCING DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK DEVELOPMENT CORPORATION DEVELOPMENT FINANCE DEVELOPMENT FINANCE INSTITUTION DEVELOPMENT FINANCE INSTITUTIONS DISBURSEMENT DUE DILIGENCE ECONOMIC DEVELOPMENT ECONOMIES OF SCALE EMERGING MARKET EMERGING MARKETS ENDOWMENTS ENTERPRISE ASSISTANCE ENTREPRENEURS EQUIPMENT EQUITY CAPITAL EQUITY FINANCING EQUITY FUNDS EQUITY INVESTMENT EQUITY INVESTMENTS EQUITY INVESTORS ESCROW ESCROW ACCOUNT EXIT MECHANISMS EXPENDITURES EXTERNAL CAPITAL FINANCES FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INVESTORS FINANCIAL LITERACY FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL RESOURCES FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SUPPORT FINANCIAL SYSTEMS FLOW OF INVESTMENT FUND MANAGEMENT FUND MANAGER FUND MANAGERS FUNDING SOURCES GRACE PERIOD GREEN REVOLUTION GROSS DOMESTIC PRODUCT GROUP OF FIRMS HOLDING HUMAN CAPITAL HUMAN DEVELOPMENT INFORMATION TECHNOLOGY INITIAL PUBLIC OFFERING INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTERNAL RATE OF RETURN INTERNAL RATES OF RETURN INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INVENTORY INVESTING INVESTMENT ACTIVITIES INVESTMENT BANK INVESTMENT BANKS INVESTMENT CAPITAL INVESTMENT CORPORATION INVESTMENT FUND INVESTMENT FUNDS INVESTMENT OPPORTUNITIES INVESTMENT PERIOD INVESTMENT PORTFOLIO INVESTMENT PROCESS INVESTMENT PROPOSALS INVESTMENT RISKS INVESTMENT STRATEGY INVESTOR INTEREST INVESTOR RELATIONS IPO JOB CREATION LEGAL ENVIRONMENT LEGAL SYSTEMS LENDER LEVEL OF RISK LOAN LOCAL INVESTORS LONG-TERM DEBT LONG-TERM FINANCE LONG-TERM INVESTOR LONG-TERM RESOURCES MARKET DEVELOPMENT MARKET ENVIRONMENT MARKET PLAYERS MARKET REGULATORS MARKET RETURNS MATURITY MICRO-ENTERPRISE MICRO-INSURANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MINORITY SHAREHOLDER MINORITY SHAREHOLDER RIGHTS MONETARY FUND NEW COMPANIES NEW MARKET NEW MARKETS OPERATING COSTS OWNERSHIP STRUCTURE PENSION PENSION FUNDS PERSONAL SAVINGS POLITICAL RISK POOL OF FUNDS POOLS OF CAPITAL PORTFOLIO PORTFOLIO MANAGEMENT PORTFOLIOS POTENTIAL INVESTMENT PRIVATE BANKS PRIVATE CAPITAL PRIVATE EQUITY PRIVATE EQUITY FINANCE PRIVATE FUND PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR FINANCE PRODUCTIVE INVESTMENT PROFESSIONAL INVESTORS PROFESSIONAL QUALIFICATIONS REAL ESTATE RETURNS RISK CAPITAL RISK MANAGEMENT RISK PROFILES SECURITIES SEPARATE ASSET SEPARATE ASSET CLASS SHAREHOLDERS SMALL ENTERPRISE SOCIAL DEVELOPMENTS START-UP START-UP CAPITAL START-UP COSTS SUBORDINATED DEBT SUPPLY CHAINS TECHNICAL ASSISTANCE TECHNICAL SUPPORT TRADE CREDIT TRANSACTION TRANSACTION COSTS TRANSPARENCY TRUST FUND TYPE OF INVESTOR UNION VALUATION VENTURE CAPITAL VENTURE CAPITAL FUND WORKING CAPITAL Divakaran, Shanthi McGinnis, Patrick J. Shariff, Masood Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance |
| relation |
Policy Research Working Paper;No. 6827 |
| description |
This paper discusses the constraints for
private equity financing of small and medium enterprises in
developing economies. In addition to capital, private
equity investors bring knowledge and expertise to the
companies in which they invest. Through active participation
on the board of directors or in partnership with management,
private equity investors equip companies with critical
improvements in governance, financial accounting, access to
markets, technology, and other drivers of business success.
Although private equity investors could help to create,
deepen, and expand growth of small and medium enterprises in
developing economies, the vast majority of private equity in
such markets targets larger or more established enterprises.
Technical assistance, when partnered with private equity,
can unlock more investor commitments and considerably
enhance the ability of small and medium enterprises in
emerging markets to raise private equity capital. Technical
assistance provides funding that allows private equity funds
to extend their reach to smaller companies. Technical
assistance can mitigate some level of risk and increase the
probability of successful investments by funding targeted
operational improvements of investee companies. Dedicated
technical assistance facilities financed by third parties,
such as development finance institutions, governments, or
other parties, have emerged to fill this critical need. The
paper discusses the provision of investment capital twinned
with technical assistance, which is now more accepted by
limited partners and general partners or fund managers and
is becoming more of a market model for private equity
finance focused on small and medium enterprises. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Divakaran, Shanthi McGinnis, Patrick J. Shariff, Masood |
| author_facet |
Divakaran, Shanthi McGinnis, Patrick J. Shariff, Masood |
| author_sort |
Divakaran, Shanthi |
| title |
Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance |
| title_short |
Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance |
| title_full |
Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance |
| title_fullStr |
Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance |
| title_full_unstemmed |
Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance |
| title_sort |
private equity and venture capital in smes in developing countries : the role for technical assistance |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/04/19327172/private-equity-venture-capital-smes-developing-countries-role-technical-assistance http://hdl.handle.net/10986/17714 |
| _version_ |
1764438247656652800 |
| spelling |
okr-10986-177142021-04-23T14:03:40Z Private Equity and Venture Capital in SMEs in Developing Countries : The Role for Technical Assistance Divakaran, Shanthi McGinnis, Patrick J. Shariff, Masood ACCESS TO CAPITAL ACCESS TO INFORMATION ACCESS TO MARKETS ACCOUNTING ACCOUNTS RECEIVABLE ADVANCED ECONOMIES ADVISORY SERVICE AFFORDABILITY ALTERNATIVE ASSET ALTERNATIVE INVESTMENTS AMOUNT OF CAPITAL ANGEL INVESTOR ANGEL INVESTORS ASSET CLASS ASSET CLASSES BANK FINANCING BENEFICIARY BUDGETING BUSINESS ADVISORS BUSINESS ADVISORY BUSINESS OPPORTUNITY BUSINESS OWNERS BUSINESS PLAN BUSINESS STRATEGY BUSINESS SUCCESS BUSINESS TRAINING CAPACITY BUILDING CAPACITY CONSTRAINT CAPACITY CONSTRAINTS CAPITAL FLOWS CAPITAL FUND CAPITAL INVESTMENTS CAPITAL MARKETS CAPITAL STRUCTURE CAPITAL · · · · FUND CASH FLOW CASH FLOWS CENTRAL BANK CONFLICTS OF INTERESTS CORPORATE DEBT CREDIT GAP CREDITS CUSTOMER BASE DEBT FINANCING DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT BANK DEVELOPMENT CORPORATION DEVELOPMENT FINANCE DEVELOPMENT FINANCE INSTITUTION DEVELOPMENT FINANCE INSTITUTIONS DISBURSEMENT DUE DILIGENCE ECONOMIC DEVELOPMENT ECONOMIES OF SCALE EMERGING MARKET EMERGING MARKETS ENDOWMENTS ENTERPRISE ASSISTANCE ENTREPRENEURS EQUIPMENT EQUITY CAPITAL EQUITY FINANCING EQUITY FUNDS EQUITY INVESTMENT EQUITY INVESTMENTS EQUITY INVESTORS ESCROW ESCROW ACCOUNT EXIT MECHANISMS EXPENDITURES EXTERNAL CAPITAL FINANCES FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIARIES FINANCIAL INVESTORS FINANCIAL LITERACY FINANCIAL MANAGEMENT FINANCIAL MARKET FINANCIAL RESOURCES FINANCIAL SERVICES FINANCIAL STATEMENTS FINANCIAL SUPPORT FINANCIAL SYSTEMS FLOW OF INVESTMENT FUND MANAGEMENT FUND MANAGER FUND MANAGERS FUNDING SOURCES GRACE PERIOD GREEN REVOLUTION GROSS DOMESTIC PRODUCT GROUP OF FIRMS HOLDING HUMAN CAPITAL HUMAN DEVELOPMENT INFORMATION TECHNOLOGY INITIAL PUBLIC OFFERING INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INTERNAL RATE OF RETURN INTERNAL RATES OF RETURN INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INVENTORY INVESTING INVESTMENT ACTIVITIES INVESTMENT BANK INVESTMENT BANKS INVESTMENT CAPITAL INVESTMENT CORPORATION INVESTMENT FUND INVESTMENT FUNDS INVESTMENT OPPORTUNITIES INVESTMENT PERIOD INVESTMENT PORTFOLIO INVESTMENT PROCESS INVESTMENT PROPOSALS INVESTMENT RISKS INVESTMENT STRATEGY INVESTOR INTEREST INVESTOR RELATIONS IPO JOB CREATION LEGAL ENVIRONMENT LEGAL SYSTEMS LENDER LEVEL OF RISK LOAN LOCAL INVESTORS LONG-TERM DEBT LONG-TERM FINANCE LONG-TERM INVESTOR LONG-TERM RESOURCES MARKET DEVELOPMENT MARKET ENVIRONMENT MARKET PLAYERS MARKET REGULATORS MARKET RETURNS MATURITY MICRO-ENTERPRISE MICRO-INSURANCE MICROCREDIT MICROFINANCE MICROFINANCE INSTITUTIONS MINORITY SHAREHOLDER MINORITY SHAREHOLDER RIGHTS MONETARY FUND NEW COMPANIES NEW MARKET NEW MARKETS OPERATING COSTS OWNERSHIP STRUCTURE PENSION PENSION FUNDS PERSONAL SAVINGS POLITICAL RISK POOL OF FUNDS POOLS OF CAPITAL PORTFOLIO PORTFOLIO MANAGEMENT PORTFOLIOS POTENTIAL INVESTMENT PRIVATE BANKS PRIVATE CAPITAL PRIVATE EQUITY PRIVATE EQUITY FINANCE PRIVATE FUND PRIVATE INVESTMENT PRIVATE INVESTORS PRIVATE SECTOR FINANCE PRODUCTIVE INVESTMENT PROFESSIONAL INVESTORS PROFESSIONAL QUALIFICATIONS REAL ESTATE RETURNS RISK CAPITAL RISK MANAGEMENT RISK PROFILES SECURITIES SEPARATE ASSET SEPARATE ASSET CLASS SHAREHOLDERS SMALL ENTERPRISE SOCIAL DEVELOPMENTS START-UP START-UP CAPITAL START-UP COSTS SUBORDINATED DEBT SUPPLY CHAINS TECHNICAL ASSISTANCE TECHNICAL SUPPORT TRADE CREDIT TRANSACTION TRANSACTION COSTS TRANSPARENCY TRUST FUND TYPE OF INVESTOR UNION VALUATION VENTURE CAPITAL VENTURE CAPITAL FUND WORKING CAPITAL This paper discusses the constraints for private equity financing of small and medium enterprises in developing economies. In addition to capital, private equity investors bring knowledge and expertise to the companies in which they invest. Through active participation on the board of directors or in partnership with management, private equity investors equip companies with critical improvements in governance, financial accounting, access to markets, technology, and other drivers of business success. Although private equity investors could help to create, deepen, and expand growth of small and medium enterprises in developing economies, the vast majority of private equity in such markets targets larger or more established enterprises. Technical assistance, when partnered with private equity, can unlock more investor commitments and considerably enhance the ability of small and medium enterprises in emerging markets to raise private equity capital. Technical assistance provides funding that allows private equity funds to extend their reach to smaller companies. Technical assistance can mitigate some level of risk and increase the probability of successful investments by funding targeted operational improvements of investee companies. Dedicated technical assistance facilities financed by third parties, such as development finance institutions, governments, or other parties, have emerged to fill this critical need. The paper discusses the provision of investment capital twinned with technical assistance, which is now more accepted by limited partners and general partners or fund managers and is becoming more of a market model for private equity finance focused on small and medium enterprises. 2014-04-10T18:56:34Z 2014-04-10T18:56:34Z 2014-04 http://documents.worldbank.org/curated/en/2014/04/19327172/private-equity-venture-capital-smes-developing-countries-role-technical-assistance http://hdl.handle.net/10986/17714 English en_US Policy Research Working Paper;No. 6827 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |