Venture capital: a promising sector in Bangladesh

With the growing economy, Bangladesh is now experiencing a boom for startups. Every year, more than 200 startups start business operations in the country, according to the LightCastle Analysis. Over the past ten years, our startup ecosystem has grown tremendously raising over $800 million in funding and producing more than 1.5 million employment opportunities.

In this situation, venture capital (VC) can help us grow further. Startup companies with a potential for growth need a certain amount of investment. Wealthy investors like to invest their capital in such businesses with a long-term growth perspective. This capital is known as venture capital and the investors are called venture capitalists.

Bangladesh, according to the Startup Blink, is ranked at the 93rd position out of 100 countries in global startup ecosystem index, its position being fourth in South Asia. Among the South Asian countries, India finds itself high up in the ranking. According to experts, venture capital is one of the reasons for Bangladesh lagging behind its neighbouring countries. Many graduates who have completed their education are now struggling to secure their desired jobs. Entrepreneurship, therefore, has become a crucial thing to address the unemployment issue that the country is currently grappling with. Against this backdrop, venture capital carries significance, since an entrepreneur commonly faces financial hurdle in spite of having great business ideas.

Banks as well as other mainstream financial institutions do not invest in early-stage ventures. Given this situation, the gap between supply and demand for capital can be addressed through the venture capital fund. The government of Bangladesh in collaboration with professionals can work to enhance the venture capital fund. The authorities concerned can provide incentive to investors through tax exemption. Apart from this, they can form public-private venture capital fund to enhance the flow of venture capital fund on a large scale. If everything goes right, Bangladesh will be able to build up a startup ecosystem, which in turn, can improve the country's position in the global startup index.

Al Amin Hossain,

Student of University of Chittagong, Chattogram,

alaminfinance1998@gmail.com