Venture capital has developed in the Western countries on account of the need to provide non-conventional, risky finance for new ventures based on innovative entrepreneurship. There are not many empirical studies of the impact of venture capital. However, a few studies do exist in context of the developed countries. Because of the paucity of information, there is hardly any comprehensive study of the results of venture capital in developing countries. There is thus a need for systematic review of the venture capital experiences in selected developed and developing countries in order to understand the developmental role of venture capital and the process underlying the success of venture capital. This study is a detailed case analysis of the venture capital experience in India. It is intended to draw lessons and implications for the development of venture capital in developing countries. The study examines: · The strategic role venture capital in the development of technology, innovative entrepreneurship and small enterprises in India; · The development process of venture capital by a systematic analysis of venture capital practices and policies in India; and · The policy initiatives necessary for the success of venture capital in developing countries based on the Indian experience. The study is based on primary information gathered through extensive interviews with a large number of managers of various venture capital companies and published material. The study is divided into five sections. Section 1 provides background of venture capital and a review of its development in some developed and developing countries. Section 2 explains the context of venture capital in India and its role in the technology and entrepreneurial development. Section 3 examines the practices and policies of the venture capital firms in India. Section 4 review the policy initiatives necessary for the growth of the venture capital industry in a developing country like India. Section 5 summarises the findings of the study.