IMPACT OF VENTURE CAPITAL ON STARTUP GROWTH IN EMERGING MARKETS

Abstract

The impact of venture capital (VC) on startup growth in emerging markets has gained increasing attention in recent years due to the dynamic role VC plays in fostering entrepreneurship and innovation. Venture capital serves as a critical catalyst for startups by providing not only financial resources but also strategic guidance, networking opportunities, and market access. In emerging markets, where access to traditional funding sources is limited, VC fills a crucial gap, enabling startups to scale and innovate at a faster pace. However, the challenges in these regions, such as regulatory constraints, underdeveloped infrastructure, and market volatility, pose significant risks. Despite these challenges, venture capital has shown to positively influence the growth trajectory of startups by enhancing their competitiveness, technological development, and ability to attract follow-on investments. This paper explores the multifaceted role of venture capital in startup ecosystems within emerging markets, examining both the opportunities and obstacles for sustained growth.