Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between venture capital funding and business survival rate of small and medium enterprises (smes) has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Enugu State where operating conditions differ markedly from more developed markets.

Enugu State presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While venture capital funding is widely discussed in policy and industry circles, empirical evidence on its actual effect on business survival rate of small and medium enterprises (smes) within Enugu State remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to venture capital funding are helping or hindering business survival rate of small and medium enterprises (smes) — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Venture Capital Funding on business survival rate of small and medium enterprises (smes) in Enugu State.
2. To assess the extent to which venture capital funding influences business survival rate of small and medium enterprises (smes) within the study area.
3. To identify the challenges associated with venture capital funding in relation to business survival rate of small and medium enterprises (smes).
4. To recommend strategies for optimizing venture capital funding in order to improve business survival rate of small and medium enterprises (smes).

1.4 Research Questions

1. What is the effect of venture capital funding on business survival rate of small and medium enterprises (smes) in Enugu State?
2. To what extent does venture capital funding influence business survival rate of small and medium enterprises (smes) within the study area?
3. What challenges are associated with venture capital funding in relation to business survival rate of small and medium enterprises (smes)?
4. What strategies can be adopted to optimize venture capital funding in order to improve business survival rate of small and medium enterprises (smes)?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around business survival rate of small and medium enterprises (smes). For managers and practitioners within Enugu State, the study provides practical insight into how venture capital funding can be better managed. Finally, it contributes to the academic literature on entrepreneurship by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

In terms of scope, this BSc study confines itself to Enugu State, focusing specifically on how venture capital funding relates to business survival rate of small and medium enterprises (smes) within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.