ABSTRACT
This study aims to describe the barriers and issues concerning the implementation of intervention strategies in the venture capital market in developing ecosystems. The chapter investigates the challenges and impediments confronting the government in developing a sustainable venture capital market. A case study methodology based on the theoretical foundations in corporate finance and venture capital literature is used to address these issues and questions. We gathered information about the current programs and practices of venture capital investments and financing offered by the Iranian National Innovation Fund (INIF) as a case study; seven of INIF’s investment programs were examined, and five related lessons have been learned and discussed. The study suggests that: (1) an indirect approach can be implemented as a triggering strategy for public intervention, (2) a range of programs alongside the indirect-direct spectrum is essential, (3) having a clear exit plan is required and is engaged in a macro-business environment, (4) investment policy statement and risk appraisal report are essential for public venture funds, and (5) designing novel instruments for public policy diffusion is a key factor to achieving an efficient program from the stockholder perspective.
