Abstract

Homegrown businesses play a significant role in employment creation, innovation, and economic development in Nigeria. Despite their importance, many indigenous enterprises experience growth constraints due to inadequate access to finance, limited managerial expertise, and restricted market opportunities. Venture capital has emerged as an alternative financing mechanism that provides not only capital but also technical support and market access capable of enhancing business growth. However, empirical evidence on how these venture capital dimensions influence the growth of homegrown businesses in Nigeria remains limited. This study examined the role of venture capital in the growth of homegrown businesses in Nigeria by investigating the effects of capital funding, technical support, and market access on business growth among small and medium enterprises (SMEs) in Kaduna State. The study adopted a quantitative cross-sectional survey design. Primary data were collected through structured questionnaires administered to owner-managers of SMEs. A multi-stage sampling technique was employed to select 493 respondents from a population of 38,908 registered SMEs in Kaduna State, while 424 valid responses were analyzed. Data were analyzed using descriptive statistics and Partial Least Squares Structural Equation Modelling (PLS-SEM) with SmartPLS 4 to assess the measurement and structural models and test the proposed hypotheses. The findings revealed that capital funding has a positive and significant effect on business growth (β = 0.55, t = 14.86, p < 0.001), making it the strongest predictor of business growth. Technical support also demonstrated a positive and significant influence (β = 0.12, t = 2.72, p = 0.010). However, market access did not significantly influence business growth (β = −0.01, t = 0.24, p = 0.810). Collectively, the three venture capital dimensions explained 34.5% (Adjusted R² = 0.345) of the variation in business growth among the sampled homegrown businesses. The findings suggest that entrepreneurs should leverage venture capital beyond financing by utilizing the managerial and technical support provided by investors. Venture capital firms should integrate financial investment with technical advisory services, while government and SMEDAN should strengthen policies and programmes that encourage venture capital investment and improve the investment readiness of indigenous businesses.