Although there have been many papers on the sources of funds and the investment activities of the VC industry (Gomper and Lerner, 1998; Gilson and Schizer, 2002; Cornelli and Yosha, 2003), their focus is placed on developed countries. ere are few insights into how their results or theories can be applied to developing countries. Also, there are theoretical discussions on the relationship between capital structure, the fi nancial systems, and investment activities (see, for instance, Black and Gilson, 1998; Hellman and Puri, 2002). However, they do not have strong supports from empirical evidence. is chapter attempts to fi ll the following gaps in the current literature. First, we discuss and provide empirical evidence on the development of the VC industry in three Asian economies, namely, China, India, and Hong Kong. Second, we compare how institutional forces impact and shape venture capitalists’ investment activities, such as

deal selection and preferred investment stages, and distributions of types of VC fi rms in the three economies. We fi nd that China and India have VC deals concentrated at early stage, while Hong Kong has VC deals concentrated on turnaround stage. Our regression analysis suggests that government support is the only signifi cant factor that shapes the choice of VC on fi nancing stages. Other factors, such as investee industry and investor types, do not have signifi cant impact on the choice.