South African Journal of Economic and Management Sciences
On-line version ISSN 1015-8812
MBHELE, Thokozani Patmond. The study of venture capital finance and investment behaviour in small and medium-sized enterprises. S. Afr. j. econ. manag. sci. [online]. 2012, vol.15, n.1, pp. 94-111. ISSN 1015-8812.
Small and medium-sized enterprises (SMEs) are often credited with innovative entrepreneurial practices and conceiving new market opportunities. Government has reinforced these positive economic externalities through policy programmes and designated support structures. Venture capital organisations often galvanise innovative knowledge by entrenching and sustaining nascent businesses through value-creating funding behaviours. In this way, the venture capital industry financially supports entrepreneurial activity for economic growth and governs and nurtures the growth of the SMEs. These show that the venture capital industry embraces value-creating opportunities on the basis of rational partnerships with enterprises that have limited track records and less formal control mechanisms. The tentative factor analysis findings suggest an integrated framework for the venture capital industry from the significant intercorrelations among the variables. The most important focus of this article, however, is its attempt to examine the behavioural traits of SMEs and venture capitalists regarding systematic finance and investment for inclusivity and due diligence.
Keywords : investment and financial behaviour; formal and informal venture capital; value options; liquidity patterns; contractual devices; managerial reputation and involvement.