According to reports, venture capital funds are more successful in closing deals compared to private equity funds in recent times because of investors' preference for the former.

   Reports suggest that contrary to the VC space, none of the PE firms could close funds successfully this year.  Industry observers feel that global investors have preferred not to invest in PE funds because of concerns on returns and liquidity. There have also been some financial scandals in PE-funded companies. Trust is critical when investors work with funds, they feel.

   Some analysts feel that the negative view on India makes fundraising difficult for India-focused PE or VC firms. At this time, global investors generally have a negative view on investing in India. In part, this is driven by frequent regulation changes, taxation uncertainties, lack of profitable exits, a dearth of company-building expertise among investors and mediocre returns, reports suggest.

   Recently, Nexus Venture Partners, a technology-focused fund, raised $270 million (Rs 1,500 crore) for its third fund.