Venture Capital as a New Approach to Developing Early-stage Firms in Emerging Countries;

Experience of South Africa & Kenya


  • Ahmed Idi Kato University of South Africa
  • Chiloane -Tsoka Evelyn Germinah Department of Applied Management University of South Africa' Pretoria



Venture capital, High -growth entrepreneurship, early-stage firms, emerging countries, South Africa, Kenya


This study aims to extend our knowledge of the new approaches to entrepreneurial finance that inspire the development of early-stage firms in developing countries. The role of entrepreneurship is well understood internationally owing to its substantial influence on new employment creation, and productivity, and a seedbed for the emergence of innovative young firms. The survival and prosperity of the HGFs are unswervingly linked to access to sustained financing during their early-stage growth, nonetheless, access to funding remains the topmost worry for young firms. Yet VC financing has a competitive edge over banks burrowing, which cannot easily substitute for VC in its absence.  We developed a multi-regression model to measure the results using survey data of 61 VC companies dealing with over 327 investment rounds from 2015-2021. The study confirms that VC investment has a dramatically flourishing prominence in nurturing early-stage firms with potential growth. Our study makes three major contributions to advancing this debate: First, our finding is expected to benefit the policymakers and civil society in the practice of creating new VC policies or altering existing ones to attract increased foreign VC investment in active countries and beyond. The government’s increased funding to the VC companies might lead to higher survival rates for new innovative industries as observed in the developed. Moreover, we discover that this research arena is recognized by a paucity of theoretical and empirical research underpinning VC’s proficiency in nurturing high-growth firms and innovative entrepreneurship.

Author Biography

Chiloane -Tsoka Evelyn Germinah, Department of Applied Management University of South Africa' Pretoria

Prof Chiloane-Tsoka GE is a professor of Entrepreneurship in the Department of Applied Management