Informal venture capital in emerging economies: A case of Pakistan

Khan, Muhammad Ibrahim and Hussain, Javed G. (2024) Informal venture capital in emerging economies: A case of Pakistan. Venture Capital. ISSN 1369-1066

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Abstract

Venture capital in emerging economies is part of shadow economy and consequently under-explored. The paper attempts to disentangle the hidden operations of informal venture capital (IVCs) in emerging economy such as Pakistan. Moreover, the study examines the impact and consequences of the un-documented economy, the role of IVCs and networks that give rise to the shadow economic systems. Using 21 semi-structured interviews, (1) we developed a conceptual framework to study the presence of IVCs; (2) the analysis suggests that IVCs fil the finance gap where formal financial institutions and government funding schemes failed to meet the needs of high-growth entrepreneurs; (3) IVCs have a significant presence in case of Pakistan and serve a vital role in promoting economic well-being; (4) the findings suggest that government-sponsored schemes give rise to favouritism and malpractices in the distribution of funds give rise to “Hybrid” IVCs operation; (5) finally, our results suggest rationalisation of IVCs promote sustainability and agenda for entrepreneurial growth. The findings have implications for policymakers to develop venture capital market and facilitate the transition of IVCs to formal capital market.

Item Type:	Article
Identification Number:	10.1080/13691066.2024.2433284
Dates:	Date Event 21 November 2024 Accepted 26 November 2024 Published Online
Uncontrolled Keywords:	Informal venture capital, sustainability, shadow economy, emerging market
Subjects:	CAH17 - business and management > CAH17-01 - business and management > CAH17-01-08 - accounting
Divisions:	Faculty of Business, Law and Social Sciences > College of Accountancy, Finance and Economics
Depositing User:	Gemma Tonks
Date Deposited:	25 Nov 2024 14:29
Last Modified:	03 Dec 2024 11:41
URI:	https://www.open-access.bcu.ac.uk/id/eprint/15991

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