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Venture capital as Institutional Infrastructure: Modelling the pathways to scalability and competitiveness in high-growth ventures in Uganda

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  • Ahmed Idi Kato

    (University of South Africa, Department of Applied Management, College of Economic and Management Sciences)

Abstract

This study conceptualises venture capital (VC) not merely as an asset class, but as a critical form of institutional infrastructure. Within the context of East African market voids, VC firms provide the structural “scaffolding”—comprising rigorous governance standards, strategic networks, and the transfer of technical skills—requisite for high-growth ventures (HGVs) to achieve disruptive scalability. Utilising a mixed-methods approach involving 49 VC firms and 12 expert interviews, the research employs Structural Equation Modelling (SEM) to quantify these latent interactions. Empirical results reveal that VC finance exerts a substantial positive influence on Value Creation (β = 0.843) and Commercialisation (β = 0.809), positioning the VC investor as a provider of “Institutional Infrastructure” rather than a mere liquidity source. However, a significant “Productivity Paradox” was identified, in which productivity exhibited a negative loading on the innovation factor, further complicated by an internal absorptive capacity threshold below USD 500,000. Qualitative findings corroborate these results, identifying a “scaling bottleneck” driven by founder concerns over equity dilution and a fragmented exit infrastructure characterised by a lack of viable IPO pathways and high taxes on returns. The study contributes to Institutional Void Theory by demonstrating that while VC is a potent catalyst for Cross-Border Scaling (β = 0.610), its impact is nonlinear and contingent upon regulatory reform and firm-level professionalization. These findings provide a critical roadmap for policymakers and entrepreneurs seeking to leverage VC for regional economic transformation, though caution is advised regarding generalisability due to the nascent state of the Ugandan VC industry and its current concentration in technological sectors.

Suggested Citation

  • Ahmed Idi Kato, 2026. "Venture capital as Institutional Infrastructure: Modelling the pathways to scalability and competitiveness in high-growth ventures in Uganda," Future Business Journal, Springer, vol. 12(1), pages 1-20, December.
    • Handle: RePEc:spr:futbus:v:12:y:2026:i:1:d:10.1186_s43093-026-00834-5
    DOI: 10.1186/s43093-026-00834-5
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