The flow of risk capital in India has increased substantially since 2000, an outcome that was significantly influenced by targeted reforms since 1999. A key problem, however, remains: over 90 percent of the money is invested in late-stage initiatives by mature firms. Even the remainder mostly finances new firms replicating proven business ideas. As a result, very few innovative startups are funded. This will have a negative ripple effect on the quality of late stage opportunities in later years.

The objective of this study is to identify causes and recommend improvements.