A research submitted in partial fulfillment of the requirement for the degree of Master of Business Administration, School of Management

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1995

This study attempts to compare the venture capital operations in Sri Lanka and Thailand with special reference to the evaluation criteria used by venture capitalists. The information used in this study was gathered through questionnaire and interviews with the chief executive officers and top managers of seven venture capital firms in Sri Lanka and nine venture capital firms in Thailand The study also relies on company publications, government publications, published and unpublished academic literature and business magazines. The study identifies the typical features of venture capital operations in both the countries in relation to deal origination, screening criteria, evaluation criteria, source of funds, stages of financing, post investment activities, exit mechanisms and legal and fiscal incentives provided by the respective governments. In the area of evaluation, the study concludes that the most important criteria for investment decisions are the "characteristics of the entrepreneur". "Integrity " is an essential factor for an investment to take place in both the countries. "characteristics of the venture management team" are the next important criteria for the venture capitalists in Sri Lanka. and Thailand "Characteristics of the product" are the least important criteria for venture capitalists in both the countries. More than fifty percent of venture capitalists in both the countries regard " high tech products " as irrelevant in making investment decisions. Finally, the study identifies some areas of concern to both the venture capitalists and the government for creating an environment that is conducive to the development of the venture capital operations.