Venture Capital & SMEs

The importance of venture capital groups in the growth of SMEs



The importance of venture capital groups in the growth of SMEs

Introduction

Venture capital is invested in early stage. Sometimes companies are without ventures. Venture capital manages the company on a broad level by providing connections and advice. Focused company build on innovation in information technology (Jootar, 2013). SMEs play a vital part in UK economy. Funding investment will be beneficial for financial growth of the country (Department of Business Innovation and Skills). Venture capital organization provides innovative knowledge by sustaining business through funding behaviour. The venture capital industry for economic growth plays a vital role in SMEs (Mbhele, 2011). Venture capital provide finance to the countries as to expand their business. The market will grow and grow faster. There is potential growth and expense of firm via venture capital (Enterprise and Industry). Venture capital is always aware of where an invention takes place and where innovation is to be done. They know that invention and innovation are obtained from the SMEs. Venture capitalist wants to maximize returns and minimize risks (Cardullo, 2004). The venture capital is comprising of equity finance. Economic studies have shown that the benefit of fairness shareholder is better than those who rely on depths (Venture Capital 2011). There is a long term capital growth of SME in venture capital. Without venture funding, Google, Face book, and Amazon would never raised enough the capital through the stock exchange. The software business has also risen thorough the launch of venture capital (Venture Capital and SME Growth).

Discussion

The Conditions of Long-Term Economic Growth

There is a swing in business cycles from a long time. The reactions and perceptions of economic peaks and thoughts are considered theses days. The concept of the new economy has been raising up these days, and it depicts that it will be declining cost of defusing information and new technology. In a number of countries stock exchange has achieved a high level of importance. The decline of foreign direct investment takes place in 2001. The recovery of international market and equity market has taken place. The economy of the world is affected by heated risk, ranging from macroeconomic imbalances. These macroeconomics imbalances have been associated with terrorism and natural calamities. It will also include the rising in oil prices. There is an uncertain outlook of the market place. This was the high risk that was managed properly (International Organization for Knowledge Economy and Enterprise Development, pp.13).

It was identified that the world economy is not strengthening the productivity in the new economy era of the late 1990's. The economic productivity was lowered in 1980's and 1970's. The number of effects is not easily quantifiable. It includes quick superiority movements in business and growth of new services. There is a masking of new determinants, and it was identified through measuring economic growth and welfare in mounting difficulties. There are new determinants of economic performance, and it caters the prosperity of million of people living around the world ...