Scope of Venture Capital Firms Worldwide

The term venture capital is interpreted in different ways. It is a form of private equity capital which is

provided to emerging or high growth potential companies. In fact they are expected to lend their

support or expertise along with the capital to the invested companies. In return for the high risks which

the venture capitalists undertaken, they have considerable amount of influence on the decisions of the

company. The growth of countries like Malaysia has been due to a large influx of venture capital and

that too particularly from the domestic or offshore areas. In financial terms venture capital is also

known as risk capital. Some of the characteristics which are required in a venture capitalist are as

follows

Well groomed management skills

Ability to take well informed decisions

Solid technological background as well as analytical skills of the highest order

Well knowledgeable also

Firms in Malaysia normally opt for this capital, even though the cost of acquiring is high. This is because

it will be very difficult for a new firm to get any financial assistance from the market or raise money from

the public. The need for this form of investment is all the more necessary in south Asian countries to

bridge the gap between capital and knowledge along with utilization of maximum resources at the

disposal.

The market in Malaysia is expected to grow in the year 2020 by up to 4.5 trillion. The expansion

strategies are oriented towards expanding the role in the capital market and growth strategies needs to

be formulated as far as market stability or investor protection is concerned. The objective of all these

strategies is to make the country prepare to counter the challenges in the present decade. In addition to

this initiatives will be taken to increase participation in Venture Capital Malaysia along with private

equity industries by establishing a regulatory framework for the functioning of these industries.

There is a thin line of difference between this form of capital and private equity. Though they resemble

a lot in similar, if you closely observe them the difference can be found. First and foremost private

equity buys firms across all industries, whereas the venture firms are more focused on technological as

well as bio tech or clean firms. The former is known to acquire a majority stake in a company, whereas

the latter only acquires a part in it. Private equity uses a combination of equities and debts whereas the

latter only focuses on the equity aspect.

To sum it up, the world is becoming a competitive place. Companies need to be all the more efficient as

far as productivity or adaptability is concerned. There is a strong demand for quality and at the same

time cost effective products.

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