The Role of Venture Capital in Financing Horticultural Exports
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Publisher:Ohio State University. Department of Agricultural, Environmental, and Development Economics
Series/Report no.:Ohio State University. Department of Agricultural Economics and Rural Sociology. ESO (Economics and Sociology Occasional Paper). No. 2209
Financing for business start-up or expansion can come from sources internal or external to the business. In the case of horticultural projects in Sub-Saharan Africa, most are internally financed by utilizing resources from other successful operations. In practice, it is difficult to identify and access the sources of finance appropriate to the enterprise's business activities for those projects which require external financing. In the emerging market environments of Sub Saharan Africa, developing a balanced financial structure is a major challenge. In this paper, we will start with a description of what venture capital is and conditions necessary to attract venture capital to horticultural investments, followed by some recent examples. This leads to the preparation of a project feasibility study and financing plan as the basis for marketing the project to venture capital investors. Although venture capital is new to Africa, there are a growing number of venture capital investment management companies which may be helpful. A directory is provided to help locate them. Last, but most importantly, we discuss the essential support role of governments and development agencies in enabling venture capital to mobilize and invest new capital.