Assessing the impact of Venture Capital financing on growth of SMEs

Abstract

This paper assesses the impact of Venture Capital financing on growth of SMEs. Government all of the world are seeking to improve unemployment situation in their respective countries. One of the numerous ways governments can use to reduce unemployment is to ensure there is more SMEs and also accelerating it growth. This study therefore examining the impact of venture capital financing on growth of SMEs. Data for this study was collected from 40 SMEs who are being financing from the venture capital funds. The instrument used was mainly questionnaire. Descriptive statistics like frequency, mean score and percentages were the statistical tools used. ANOVA and regression were the inferential statistical tools used to ascertain the impact of venture capital financing on growth of SMEs. The main aim of this paper was to examine the impact of Venture Capital financing on the growth of SMEs. The study found that businesses have expanded, improved in the profitability, number of employees have gone up due to VCF financing. The study also found that VCF has significant influence on the performance of SMEs. The study found that most of the businesses have turnovers low the threshold of World Bank. It is therefore recommended that fund managers will intensify their advisory role to ensure that businesses increase their turnovers.