International Journal of Innovative Technology and Exploring Engineering (IJITEE) ISSN: 2278-3075, Volume-9 Issue-1, November 2019 2409 Published By: Blue Eyes Intelligence Engineering & Sciences Publication Retrieval Number: A4335119119/2019©BEIESP DOI: 10.35940/ijitee.A4335.119119 Abstract: The study exhorts to ascertain the general perception that Venture Capitalists fund innovative technology projects in the Indian context using primary and secondary data. A structured questionnaire was used to elicit response from 101 (sample) out of 134 (Population) SEBI registered and active Venture Capital firms in the recent past. The study analyses the mode of funding by Venture Capital firms and their geographical dispersion. The study ascertains whether Venture Capital firms have enabled innovation in the Indian context during the recent past or not. Finally, the study concludes that Venture Capital Investments have not been very enabling for innovative technologies in the Indian context, which is contrary to the relevant literature available in the context of USA and other developed nations. Keywords: Innovation, Investments, Start-up, Technology, Venture Capital. I. INTRODUCTION The firms that are financed by Venture Capital are supposed to be more innovative than the others (Samuel and Josh, 2000). Venture Capital is a promising mechanism for innovation and growth one on hand and Venture Capital is the appropriate to the equity needs of firms based on innovation on other hand. However, over the years, Venture Capital became more formalized and more appropriate generic term of „private equity‟ was coined. The “equity gap” that exists due to the strict regulations of conventional finance of tangible asset requirement and previous track record of enterprise faced by the innovative and nascent enterprises is filled by venture capital firms. VCFs provide finance to innovative ventures during the first stage of innovation (Florida et. al Kenney, 1988). Large corporate houses invest in corporate ventures to develop their innovative capabilities (Engel, 2011; Birkinshaw et al., 2002). It is also a means for public policy to foster technological or environmental concerns such as, Cleantech (Hargadon et Kenney, 2012). However, recent research (Mason and Harrison, 2002) indicates that the profitability of venture capital funds is rather low and that their impact on innovation is uncertain than expected, thus putting the model of venture capital itself into question. Hence, it is an opportunity to review the model of venture capital as presented by the economic and management literature, to examine whether these assumptions are valid in the Indian context. As a mechanism to foster innovation for young firms in highly technological and capital-intensive sectors, authors also question whether this Revised Manuscript Received on November 05, 2019. * Correspondence Author Seema Bushra*, Department of Business Administration, Aligarh Muslim University, Aligarh, India. Email: seemabushra@gmail.com Prof. Javaid Akhter, Department of Business Administration, Aligarh Muslim University, Aligarh, India. Email: javedmba@hotmail.com model takes recent advances in innovation management into account, or whether it is a mostly finance-based model. India, the second most populated country in the world with more than 1.24 billion people (Census, 2011), has emerged as one of the fastest growing economies in the recent years. With the projected compounded annual growth rate of 9%, India‟s GDP is likely to be US$3.26 trillion by 2020 (Statista, Source: Statista, https://www.statista.com/statistics/263771/gross-domestic-pr oduct-gdp-in-india/ ). The availability of technically skilled and linguistically adept manpower, large size of market, sustainable high growth rate, low domestic penetration and improving regulatory conditions make India a very attractive destination for venture capital investment. India has been doing well in IT/ITES industry; it is still a low-cost developer and service provider. As India continues its rapid growth path, several sectors of the economy such as telecom, FMCG, infrastructure and education are growing rapidly and offer significant opportunities for venture capital. For the purpose of this study, innovation/innovative technology is defined as a new technology for commercial use or an existing technology with some modifications/ improvements resulting in new products/new services/new applications for commercial use. The study attempts to ascertain whether the recent (during the last three years, 2016-18) venture capital investments had supported innovation in the Indian context as per the “innovation” or not? The reason for choosing this time frame is because of surge in venture capital financing and IT/ITES sector, which accounted for 45% of the venture capital financing during the year 2018. Also, India has introduced Make in India and Start up India campaigns in the years 2014 and 2016 respectively. The Make in India campaign is an attempt to make India a global manufacturing hub, while the Start-up India campaign is designed to encourage entrepreneurial talent. II. LITERATURE REVIEW Richard & Martin (1988) find that venture capital transformed the innovation process in the USA. Venture capital financed innovation is a new model of innovation catalyzing technological change. Paul & Josh (2001) find that the manners in which venture capital funds are raised and structured, the capital is invested in young firms, and these investments are concluded are now much better managed. Samuel & Josh (2002) examine the influence of venture capital on patented inventions in the United States across twenty industries over three decades and address concerns of causality in several ways. Did Venture Capital Promote Innovation in India? Seema Bushra, Javaid Akhter