Venture Capital Mirage: Assessing USAID Experience with Equity Investment

摘要

This study looks broadly at previous experience with equity investment to answerthat question. It examines 13 USAID venture capital projects. It also reviews USAID's recent experience with enterprise funds in Eastern Europe and surveys related experience of others. This report is organized as follows. Chapter 1 lays out the traditional rationale for venture capital activity. Chapter 2 describes the structure of the industry in the developed countries where it is most advanced. Chapter 3 summarizes USAID's experience with venture capital projects, and chapter 4 discusses enterprise funds, used by USAID in Eastern Europe. Chapter 5 examines the experience of private enterprises and multilateral agencies that have promoted venture capital in developing countries. Chapter 6 responds to the question of why venture capital projects usually fail, and chapter 7 provides conclusions.