Ventura Capital Company As An Alternative Financing Source For Smies Development In Solok City

Abstract

The aims of this research are to analyze and to discuss two things: (i)the effects of venture capital investment to the development growth of Small and Medium Industrial Enterprise (SMIEs); (ii)the capital needed to start-up of SMEIs; (iii)the market prospective of venture capital company (VCC) in Solok City. Research method used is descriptive and quantitative statistical analysis. The research findings show that (i)using “OLS equation model” has proved the important of VCC’s creation and development in Solok City, it is indicated by the value of parameter coefficients of OLS equation model which influence significantly the dependent variable; (ii)the expected capital need of start-up SMES in the year of 2015 according to 84 respondents is Rp 6.150.000.000., but the credit provided from bank is only Rp 3.020.000.000., meaning from the bank side not all of credit demanded available. This implies the market opportunity is opened to non bank institution such as VCC. Furthermore, HDI Kota Solok is 77, 44 (2017), it is categorized as a quite high value due to far greater than 50.00. High value of HDI gives a stronger support to SMIEs development and often used by VCC as a main indicator to determine the business partner company (BPC) to be financed. In short, the research findings confirmed that VCC is needed and its market opens widely to stimulate the growth of SMIEs and economy of Solok City now and in the future.