UNITED STATES
            SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

                                  FORM N-17f-2

               Certificate of Accounting of Securities and Similar
                         Investments in the Custody of
                         Management Investment Companies

                    Pursuant to Rule 17f-2 [17 CFR 270.17f-2]

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 1. Investment Company Act File Number:          Date examination completed:

   811-1056                                      March 30, 2007


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 2. State identification Number:
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        AL          AK         AZ          AR          CA          CO
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        CT          DE         DC          FL          GA          HI
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        ID          IL         IN          IA          KS          KY
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        LA          ME         MD          MA          MI          MN
- --------------------------------------------------------------------------------

        MS          MO         MT          NE          NV          NH
- --------------------------------------------------------------------------------

        NJ          NM         NY          NC          ND          OH
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        OK          OR         PA          RI          SC          SD
- --------------------------------------------------------------------------------

        TN          TX         UT          VT          VA          WA
- --------------------------------------------------------------------------------

        WV          WI         WY          PUERTO RICO
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         Other (specify):
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3. Exact name of  investment  company as  specified in  registration  statement:
Capital Southwest Corporation

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4. Address of principal  executive  office (number,  street,  city,  state,  zip
code): 12900 Preston Road, Suite 700, Dallas, Texas 75230

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM N-17f-2

               Certificate of Accounting of Securities and Similar
                          Investments in the Custody of
                         Management Investment Companies

                    Pursuant to Rule 17f-2 [17 CFR 270.17f-2]

- --------------------------------------------------------------------------------
 1. Investment Company Act File Number:           Date examination completed:

 811-1947                                         March 30, 2007



- --------------------------------------------------------------------------------
 2. State identification Number:
- --------------------------------------------------------------------------------
        AL          AK          AZ          AR           CA          CO
- --------------------------------------------------------------------------------
        CT          DE          DC          FL           GA          HI
- --------------------------------------------------------------------------------
        ID          IL          IN          IA           KS          KY
- --------------------------------------------------------------------------------
        LA          ME          MD          MA           MI          MN
- --------------------------------------------------------------------------------
        MS          MO          MT          NE           NV          NH
- --------------------------------------------------------------------------------
        NJ          NM          NY          NC           ND          OH
- --------------------------------------------------------------------------------
        OK          OR          PA          RI           SC          SD
- --------------------------------------------------------------------------------
        TN          TX          UT          VT           VA          WA
- --------------------------------------------------------------------------------
        WV          WI          WY          PUERTO RICO
- --------------------------------------------------------------------------------
        Other (specify):

- --------------------------------------------------------------------------------
3. Exact name of  investment  company as  specified in  registration  statement:
Capital Southwest Venture Corporation

- --------------------------------------------------------------------------------
4. Address of principal  executive  office (number,  street,  city,  state,  zip
code): 12900 Preston Road, Suite 700, Dallas, Texas 75230

- --------------------------------------------------------------------------------









             Report of Independent Registered Public Accounting Firm



To the Board of Directors of
Capital Southwest Corporation and Subsidiary:

We have examined management's assertion, included in the accompanying Management
Statement Regarding Compliance With Certain Provisions of the Investment Company
Act of 1940, that Capital  Southwest  Corporation and subsidiary (the "Company")
complied with the  requirements  of subsections  (b) and (c) of rule 17f-2 under
the Investment Company Act of 1940 (the "Act") as of March 30, 2007.  Management
is  responsible  for the  Company's  compliance  with  those  requirements.  Our
responsibility  is to express an opinion  on  management's  assertion  about the
Company's compliance based on our examination.

Our  examination  was conducted in  accordance  with the standards of the Public
Company Accounting  Oversight Board (United States) and,  accordingly,  included
examining,  on a test basis,  evidence about the Company's compliance with those
requirements and performing such other procedures as we considered  necessary in
the  circumstances.  Included  among our  procedures  were the  following  tests
performed  as of March 30,  2007,  and with  respect to  agreement  of  security
purchases  and sales,  for the period from January 5, 2007 (the date of the last
examination) through March 30, 2007:

o    Count and  inspection  of all  securities  located in the vault of JPMorgan
     Chase & Co. Safekeeping Department in New York City, New York.

o    Confirmation  of all  securities  held by  Citigroup  Smith  Barney and the
     custodian.

o    Reconciliation  of all such  securities  to the  books and  records  of the
     Company.

o    Agreement of one security purchase since our last report from the books and
     records of the Company to the Company's bank statements.

We believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal  determination on the Company's  compliance
with specified requirements.

In our opinion,  management's  assertion that Capital Southwest  Corporation and
subsidiary  complied with the  requirements  of subsections  (b) and (c) of rule
17f-2 of the Investment  Company Act of 1940 as of March 30, 2007,  with respect
to  securities  reflected  in the  investment  account of the  Company is fairly
stated, in all material respects.

This report is intended solely for the information and use of management and the
Board of Directors  of Capital  Southwest  Corporation  and  subsidiary  and the
Securities  and Exchange  Commission and is not intended to be and should not be
used by anyone other than these specified parties.


                                                          /S/ Grant Thornton LLP

Dallas, Texas
May 2, 2007







                    Management Statement Regarding Compliance
          With Certain Provisions of the Investment Company Act of 1940




We, as members of management of Capital  Southwest  Corporation  and  subsidiary
(the  "Company"),  are  responsible  for  complying  with  the  requirements  of
subsections  (b) and (c) of rule 17f-2,  "Custody of  Investments  by Registered
Management Investment  Companies," of the Investment Company Act of 1940. We are
also responsible for establishing and maintaining  effective  internal  controls
over compliance with those requirements.  We have performed an evaluation of the
Company's  compliance  with the  requirements of subsections (b) and (c) of rule
17f-2 as of March 30, 2007 and from January 5, 2007 through March 30, 2007.

Based on this evaluation,  we assert that the Company was in compliance with the
requirements of subsections (b) and (c) of rule 17f-2 of the Investment  Company
Act of 1940 as of March 30, 2007,  and from  January 5, 2007  through  March 30,
2007 with  respect to  securities  reflected  in the  investment  account of the
Company.




                                                   Capital Southwest Corporation
                                                   [Name of Company]


                                                   /s/ Susan K. Hodgson
                                                   [Name]


                                                   Secretary-Treasurer
                                                   [Title]


                                                   March 30, 2007
                                                   [Date]