Entrepreneurial Agglomeration: a source of high returns for venture capitalists in Developing Countries - The Case of Pakistan

Venture capital (VC) financing, seeking high growth opportunities, could provide an effective way for a coincidence of wants between high economic growth objective of developing countries like Pakistan and the aim of VCs. I examine the case of Pakistan, an emerging market in South East Asia, where the youth – particularly budding entrepreneurs – lack access to capital. However, the quantum of foreign investment by itself may not be sufficient to attain high growth, high returns. Investment in human capital to develop an entrepreneurial agglomeration and ecosystem is a necessary factor, along with finding suitable sectors for investment, where comparative advantage exists.