- Venture capitalists provide the much needed finance to tour small businesses which lack access to capital markets due to their size.
- Small medium scale businesses may lack managerial skills. Venture capitalists sere as active partners through involvement in this businesses and therefore provide marketing and planning skills as the also want to see their investments succeed.
- Venture capitalists encourage tree spirit of entrepreneurship therefore small businesses are encouraged to see their ideas through as they know they will get startup capital.
- Venture capitalists provide improved technology so that small and medium scale business are in line with changes in technology and are therefore able to compete with other firms of the same level.
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