The Evolution of the Venture Capital Market in India

The case examines the early-stage venture capital industry in India, in 2004. The study is focused on technology-based early-stage venture capital, as opposed to private equity type investments. Using the past success of Draper International Fund as background, the case briefly visits the history and evolution of venture capital in India and current market opportunities. Next, it presents a basic framework for examining a venture capital ecosystem, and analyzes the promise of the Indian venture capital market in its context. The emergence of a strong Indo-US corridor is also highlighted, and comparisons are made with Silicon Valley, California, and Israel. This case can be used to illustrate the entry strategy options for foreign venture capitalists into the Indian market, evolving trends and investible opportunities in India, and for a basic framework of the ecosystem of a venture capital market.