India Risk Capital Project
The objective of this project is to research the risk capital industry in India, with a focus on early stage investing, in order to recommend investment models, institutions and mechanisms to enhance size and delivery of risk capital and provide low-cost entrepreneurship training, and to recommend consistent policy changes.
The intent is to make recommendations that are not only significant, but also relevant, i.e., designed to be implementable through modifications of the appropriate policies and regulations and creation of institutions. For example, if a program of public-private partnership for providing early-stage risk capital emerges as a central recommendation, significance would be tested by its potential to unlock at least $1 billion of capital as a result. To enable both significance and relevance, the research team will continue in a subsequent phase to work with stakeholders to see its recommendations implemented in the shortest possible time-period.
The driver for this study is the shortage of early-stage risk capital. This is due to poor incentives to supply and demand such capital arising from inefficient policies and regulatory structures. The gap is also partly attributable to a lack of expertise and risk management among capital users and providers. Unless corrected, the natural spread of entrepreneurship across risk classes and stages of work with the potential for innovative, large-scale outcomes will instead be channeled, as at present, into predominantly late-stage, me-too projects with diminishing returns. Thus, all stakeholders -- government and risk-capital's users and providers -- will be significantly impacted by the implementation of the project's recommendations.