Purpose
This paper empirically examined the relationship between Venture capital Financing and the profitability of portfolio companies in Uganda. Several empirical works paint an intriguing picture that VC financing is a reality in fostering economic growth of the early-stage enterprises
Design/methodology/approach
The paper embraced a mixed-method wherein quantitative data were collected from 68 key VC stakeholders and statistical data was analysed using a multiple regression model by generating the results from the SPSS. This was supplemented by 16 semi-structured face-to-face interviews. Qualitative data were transcribed and analysed using Altas-ti.
Findings
The key findings from this study suggest superior performance of VC-financed enterprises following VC financing when compared to non-VC financed enterprises. The VC-financed enterprises realised tremendous growth in terms of: Return on Equity - 42.3%; profitability - 30% - 50%; Return on Assets - 44.5%. In addition, 63% of the respondents confirmed a positive impact of government regulatory policy in enhancing the development of the early-stage firms. The higher the percentage of growth the better for the growth of the company.
Research limitations/implications
This study may assist the policymakers and business fraternity to develop policy frameworks tailored to enhancing a vibrant venture capital market in Uganda.
Contribution/value-add
This study makes a vital contribution to knowledge by offering a diversified framework for enterprise success, to benefit the VC stakeholders in customizing funding programs that can propel the early-stage enterprise success in Uganda and similar emerging economies.