35 It may be difficult in many LDC markets to find a series of innovative, "high-tech" enterprises which can capture a business niche in which to grow. Yet, venture capital operations could flourish in areas of low-technology and in the service sector--where the foundation of competitive advantage would be an innovative distribution system or marketing strategy. New business opportunities are likely to emerge in deregulating industries. New market niches may also result from transfer of technologies and marketing of ideas already tested in developed countries. Agribusiness, aquaculture, and horticulture can provide major venture capital investing opportunities; among them, food irradiation, manufacturing of tropical fruit juice concentrates, marketing and distribution of fresh vegetables and flowers, development of new packaging technology specifically designed for agricultural projects. In many cases, assessment of business opportunities could be usefully supported by market research on the taste of the consumers in the developing countries. Venture capital may be an ideal form of finance to enable dynamic small enterprises based on craft tradition to make the transition to newer technologies. In the smaller LDC markets, exports may be the clue to provide the potential for growth to manufactured products.

Also along these lines, sm3ll domestic markets may force a venture capital community to go transnational. Such is, for example, the case of Singapore. As a first step in this direction, Singapore has tried to set up transnational links, primarily with the venture capital community in Silicon Valley and with the Advent group. Ultimately, however, Singapore may find it more profitable to integrate a regional venture capital community linked to the surrounding ASEAN countries with a focus upon low-technology ventures appropriate to these developing economies, rather than trying to focus upon high-technology manufacturing for the American venture capital community.<sup>47</sup> Successful venture capital operations depend largely upon the skills and competence of the managers and their ability to add value to the investees. These skills are not abundant in many developing countries, and the scarce high caliber manpower may prefer working for large and stable organizations to becoming independent in risky new ventures. In this framework, efforts should be addressed toward providing technical assistance, transferring managerial skills and training local personnel. In the US, venture capital firms are employing experienced senior managers from medium size and larger corporations, and are working with successful entrepreneurs either as direct associates or partners in an affiliate fund arrangement. Such model might be explored in LDCs markets.

A different problem has to do with the re'uctance of many entrepreneurs in the developing world to share management control of their firm with outsiders. In such cases, the role of the venture capitalist may have to be enlarged in terms of working with the entrepreneur in developing the new investment idea, performing the market research, preparing the business plan, putting together a management team and securing the financing from the venture capital community. Alternatively, a package of financial instruments may need to be utilized so -hat by combining equity and debt contracts, the entrepreneur will not worry about dilution of ownership.

47 We owe this point to Richard Radez.