You say its half full and I say its half empty: A Lifecycle Analysis of VC-PE Investments in India

Abstract

The Venture Capital and Private Equity industry in India has grown significantly in recent years. Using the data from the years 2004 – 08, the life cycle analysis provides findings that can impact the long term growth of the industry. A large proportion of the deals are round 1 investments with a dramatic drop in subsequent rounds.  Most investments are in late stage financing and take place many years after the incorporation of the investee firm. The industry is also characterized by the short duration of the investments. To ensure long term growth of the industry in India, investments should be made in early stage financing, investors should stay invested for a longer duration, and larger rounds of funding should be made in the portfolio companies.