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Venture Capital Financing: An Opportunity for Small and Medium Scale Enterprises in Ghana

Author

Listed:
  • Francis Boadu

    (Institute of Entrepreneurship & Enterprise Development, Kumasi Polytechnic)

  • Gabriel Dwomoh

    (Institute of Entrepreneurship & Enterprise Development, Kumasi Polytechnic)

  • Sarpong Appiah

    (Department of Marketing, Takoradi Polytechnic)

  • Elizabeth Dwomo-Fokuo

    (Institute of Entrepreneurship & Enterprise Development, Kumasi Polytechnic)

Abstract

The paper aims to increase the understanding of venture capital industry in Ghana by examining the role of venture capital financing in aiding small and medium scale enterprises (SMEs) in Ghana. Using the conventional questionnaires administration and interviews, analysis of data collected from the Venture Capital Trust Fund (VCTF) and SMEs supported by venture capitalist (VCs) revealed that venture capital companies contributes in the area of fresh funds (23.8%), adding value by providing the beneficiaries with skills/training (33.3%), access to business opportunities (26.2%) and advisory services (16.7%). The findings also show that venture capital financing has a positive and statistically significant impact on job creation (33.3%), revenue for VC and SMEs (33.3%), business growth (16.7%) and expansion (16.7%) in a manner consistent with economic expectation.

Suggested Citation

  • Francis Boadu & Gabriel Dwomoh & Sarpong Appiah & Elizabeth Dwomo-Fokuo, 2014. "Venture Capital Financing: An Opportunity for Small and Medium Scale Enterprises in Ghana," Journal of Entrepreneurship and Business Innovation, Macrothink Institute, Journal of Entrepreneurship and Business Innovation, vol. 1(1), pages 1-15, June.
    • Handle: RePEc:mth:jebi88:v:1:y:2014:i:1:p:1-15
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    References listed on IDEAS

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    1. Samuel Kortum & Josh Lerner, 2000. "Assessing the Contribution of Venture Capital to Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 674-692, Winter.
    2. Josh Lerner, 2011. "The Future of Private Equity," European Financial Management, European Financial Management Association, vol. 17(3), pages 423-435, June.
    3. Brown, J David & Earle, John S & Lup, Dana, 2005. "What Makes Small Firms Grow? Finance, Human Capital, Technical Assistance, and the Business Environment in Romania," Economic Development and Cultural Change, University of Chicago Press, vol. 54(1), pages 33-70, October.
    4. Paul Gompers & Josh Lerner, 2001. "The Venture Capital Revolution," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 145-168, Spring.
    5. Thomas J. Chemmanur & Karthik Krishnan & Debarshi K. Nandy, 2011. "How Does Venture Capital Financing Improve Efficiency in Private Firms? A Look Beneath the Surface," The Review of Financial Studies, Society for Financial Studies, vol. 24(12), pages 4037-4090.
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    Cited by:

    1. Obi Berko Obeng Damoah & Augustine Awuah Peprah, 2021. "Synthesis of small and medium enterprise research in Ghana," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 451-468, December.

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