VENTURE CAPITAL
By Kapil Dev Ghimire
The greatest drawback of newly-established entrepreneurs is insufficient financial backing. Though many are enthusiastic about opening their own firms or service-oriented organizations, they are often discouraged or left without hope due to lack of funds. The enterprises that are near collapse do not get adequate capital to push them back on their feet and though a few may break through the pressure, most do not survive. This is why internationally, in this fast-paced and highly technical world, venture capital has been introduced as a life-saving body that revives sick enterprises when they are suffering great losses or facing bankruptcy. Venture capitalists are the role models of entrepreneurship and are a capitalistic body that maintain well-being and mature attitudes among entrepreneurs.
In a narrow sense, venture capital can be defined as start up or development capital provided to small but growing firms. In broader terms, venture capital refers to that capital which is provided to set up new firms with new ideas and technology.
In a country like Nepal, the venture capital idea may work well with newly established enterprises and it may be able to revive sick enterprises. The concept of Nepalese entrepreneurship only lately became popular and many individuals are nowadays involved in beginning small businesses. However, many enterprises have not been able to secure a market or invest wisely. Without proper guidance, they have been trapped unknowingly into a situation from which they cannot rise. Therefore, the foremost concern of country developers is to begin planning a venture capital body and initiate positive responses from other offices in the government. Though some awareness has been created among banks and finance companies to take a step in this direction, unless the need is expressed fully for the requirement of this kind of body, it will take a long time before something concrete is done about the establishment of venture capital in Nepal.
Since venture capitalists provide necessary skills, strengthen an enterprise's weak financial status with adequate funds, plan a viable marketing approach for better management, and impart entrepreneurial skills to employees, they will help encourage economic growth. In every stage of enterprise development, whether helping an idea take root or securely establishing an idea that has recently been implemented, venture capital should be available. But one must, however, realize that funds are not the only part of venture capital. Along with finances, venture capital focuses on providing managerial skills for the smooth running of an enterprise in production, marketing, human resource development, and fund stabilization sectors.
Basically, ignorance on the part of entrepreneurs regarding the advantages and disadvantages of venture capital may be a main reason why the concept has never been developed in this country. The government's liberalization policy and its support towards privatization may appear enough but when it comes down to really putting words into action, there is not enough of official encouragement to actually make things happen.
However, in time developers will have to think seriously about the problems that many entrepreneurs are facing with finance and management and resolve the problems to stabilize their conditions. SBPP is seriously thinking about promoting Venture Capital.