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Asked a question 4 years ago

How to stimulate private investment in new business venture?

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Investment in financial resources of business is very much important that an entrepreneur needs to start a new business. Starting up business involves various costs like registration cost, obtaining license, management cost, printing prospectus and business cards and many other expenses. So funding is most important element while starting business. So the required funds can be arranged from financial institutions, friends, private investors etc. Therefore an entrepreneur needs to consider those factors which simulate private investment in new business venture. So the following are such factors that need consideration are :

  1. Abolition of monopoly - monopoly can be harmful for economy as it reduces competition in market and decrease the probability of introduction of of improved products. So for encouraging new investors to enter into the market Abolition of monopoly is necessary to a certain extend. Hence Abolition of monopoly can stimulate private investment. 
  2. Technology and innovation. - Technology and innovation plays important role in entrepreneurial ventures as nowadays investors prefer to invest in those ventures that have something unique to offer to society. So adoption of Technology and trying innovative ways to produce goods and services attracts investors. 
  3. Rate of interest - investment is sensitive to change in investment. Investment increases when rate of interest is low and vice versa. So rate of interest should be kept low to increase investment activity in economy.