The document is a report submitted to Dr. Premraj Alva containing details of a group project. It includes the names and roll numbers of 10 group members and their assigned topics. Abhijeet Sankapal is identified as the group leader. The topics covered in the project are related to venture capital, including its meaning, definition, history, forms, advantages to investors and promoters, stages of financing, and risks associated with venture capital funding.

1. Group Leader – Abhijeet Sankapal
Presented to – Dr.Premraj Alva
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2. Roll
no.
Name
91
Prathamesh Shirsat
92
Ketan Sawant
93
Swapnali More
94
Ruchita Gurav
95
Nikhil Kalamkar
96
Premanand Maharana
97
Abhijeet Sankapal
(Group Leader)
98
Manisha More
99
Raghav Gupta
100
Topic
Priyanka Dabholkar
2

3. Meaning – VC is long term risk capital to
finance high technology projects which involve
risks but at the same time has strong potential
for growth .venture capitalist pool their
resources including managerial abilities to assist
new entrepreneurs in early years of project.
 Definition – “A financing institution which joins
an entrepreneur as a co-promoter
in a project & share the risks
& rewards of enterprise ”

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4. 
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In the 1920's & 30's, the wealthy families of and
individuals investors provided the start up money for
companies Eg. Eastern Airlines and Xerox
VC funds set up was the one by the Rockfeller Family
which started a special fund called VENROCK in 1950
General Doriot, a professor at Harvard Business School,
in 1946 set up the American Research and Development
Corporation (ARD)
ARD's approach was a classic VC
ARD's investment in Digital
Equipment Corporation (DEC)
in 1957 was a watershed in
the history of VC financing
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5. 
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Form of equity participation
High risk & high potential projects
Commercialization of new idea / new
technologies
Joins entrepreneur as co- promoter
Continuous involvement
Disinvestment option
VC is not injection of funds
Investment in small/medium
scale enterprises
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6. Advantages to investing public –
1.Reuce risk & stop mal practices of management
2.Venture funds equipped with necessary skills will able to
study prospects of business
3.Venture fund having representatives on BOD of
company.

Advantages to promoters –
1.Success of IPO – 10 Underwrites , Brokers & Investors
2.Statutory Formalities– sanctions, underwriting , brokers
arrangement
3.Cost & expenses – IPO of equity shares 10% to 15% of
nominal value of issue ,recurring cost & Stock exchange
listing fee.

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7.  General-
1.Reduce time between technological
innovation & commercial exploitation
2.developing new process/ products .
3.Cushion to support business borrowings
4.Channelise investment in new high tech
business / exist of sick unit
5.Economy development
6.VC firms serves as intermediary
7.Sharing responsibility
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8. 
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General Business Strategy Advice
Develop a Financing Plan
Refine the Business Plan
Marketing Advice
and Strategies
Develop Contingencies
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10. Financial
Stage
Seed
Money
Period
7-10
Risk
Perception
Extreme
Activity to be financed
For supporting a concept or idea or R&D for product
development
Initializing operations or developing prototypes
Start Up
5-9
Very High
Start commercials production and marketing
First
Stage
Second
Stage
3-7
3-5
High
Sufficiently
high
Expand market and growing working capital
need
Market expansion, acquisition & product
development for profit making company
Third
Stage
1-3
Medium
Fourth
Stage
1-3
Low
Facilitating public issue
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11. 
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Deal origination-the VC investor creates a pipeline of
deals or investment opportunities that he would consider
for investing in. Deal may originate in various ways.
referral system, active search system, and
intermediaries.
Screening-VCFs, before going for an in-depth analysis,
carry out initial screening of all projects .
Due Diligence-Due diligence is the industry jargon for all
the activities. The venture capitalists evaluate the
quality of entrepreneur before appraising characteristics
of the product, market or technology
1. Preliminary evaluation
2. Detailed evaluation
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12. 
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Deal Structuring- In this process, the venture capitalist
and the venture company negotiate the terms of the
deals, that is, the amount, form and price of the
investment
Post Investment Activities1.direction of the venture
2.day-to-day operation of the venture
3. install a new management team
Exit1. Initial Public Offerings (IPOs)
2. Acquisition by another company
3. Purchase of the venture capitalist's
shares by the promoter, or
4. Purchase of the venture capitalist's
share by an outsider
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15. Introduction - The Indian Private Equity and Venture Capital
Association was established in 1993 and is based in New Delhi , the
capital of India IVCA is a member based national organization that
represents Venture capital and Private equity firms, promotes the
industry within India and throughout the world and encourages
investment in high growth companies
 History of Venture Capital in India1. Venture Capital functions were run by development financial
institutions such as the IDBI ICICI Bank, and State Financial
corporations. Publicly raised funds were the main source of
Venture Capital
2. Year 1988 marked the establishment of the Technology
Development and Information Company of India Ltd.promoted by
the ICICI and UTI & was immediately followed by the Gujurat
Venture Finance Ltd.
3. In the year 1996, Security Exchange Board of India introduced
the Foreign Venture Capital and Private Equity Funds investing in
India

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16. The Growth of Venture Capital Funds In India
In the year 2000, SEBI
Year
No. of VC Funds
registered 13 more VC funds
2001
77
& their number increases to
32 .
2002
78
The SEBI has permitted VC
funds to invite in real estate.
2003
81
This has open the doors for
2004
86
organized debt & equity
instrument in real estate
2005
105
sector .
VC firm invited
2006
146
$ 117 million over
27 deals in India
2008
160
during 6 months
2013
333
Ending june 2009.
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18. 
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The guidelines issued by the Govt. of India
were meant to encourage private promoters.
their holding could not exceed 20% of
the equity of such a joint effort
The guidelines of funding relatively new projects with
no proven record in market acceptability.
Section 372 of the Companies Act prohibits investment
in a single company beyond 10% of the paid up capital of
a company
Indian educational system fails to march laboratory
research with commercial application.
Lack of entrepreneurial tradition
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19. 
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Venture capital funds, as the position stands
today mostly operate from metropolitan town
The venture capital has not been given
tax incentives
Section 372 of the Companies Act places restrictions
on inter-corporate investments.
Section 369,309 and 387 of the Companies Act place
restrictions on the remuneration of managing
directors, directors and managers.
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21. 
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Finance-The venture capitalist injects long-term
equity finance, which provides a solid capital base for
future grow
Business Partner-share the risks and rewards.
Mentoring-The venture capitalist is able to provide
strategic, operational and financial advice to the
company
Alliances-The venture capitalist also has a network of
contacts in many areas that can add value to the
company
Facilitation of Exit-Venture capitalists are experienced
in the process of preparing a company for an initial
public offering (IPO) of its shares onto the stock
exchanges
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Product Risk: The products concerned may have little or no
track record in the markets as they are largely untested and
usually have high obsolescence rates.
Entrepreneur risk: another of the disadvantages of venture
capital funding is that it is difficult to evaluate the new
management and new business application without any prior
track record
Concentration risk: Focusing on small market, which can
relate to either the product or in geographical terms, raises
exposure to sectoral downturn
Technology risk: hard to assess new technology on small set
of products
Duration risk: Generally a longer long-gestation period for
funding is needed.
Asset risk: Due to a high percentage of fixed assets with high
obsolescence, along with a high fraction of human capital,
there is a lack of collateralizable assets, which is one of the
drawbacks in venture capital funding
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23. 
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Debt-business loans, government-backed Small
Business Administration (SBA) loans, and factoring
loans
Friends and family
Angel investors-like venture capitalists in that they
invest in early-stage companies to get a large return
on investment
Crowdfunding- Crowdfunding is a great way to presell your product before it’s ready to ship to
customers
Growing organically-When you grow your company
organically, you take out only what you need to
survive and put the rest of your profits back into the
company as an investment.
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25. 
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Introduction – A committee on technology
innovation & Venture capital headed by former
finance secretary Nitin Desai was appointed by
Planning Commission in 2006 to suggest measures to rise
the flow of VC funds.
SuggestionsTo set up an Early Stage Venture Fund (ESVF) through
public-private partnership (PPP).
To provide fiscal incentive by way of set-off against taxable
income for those individuals who invest in start up
To extend same fiscal incentive to those who invest in
domestic venture capital funds with corpus less than Rs.250
cr.
To create Limited Liability Corporations(CLCs)
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26. 
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To extend applicability of such LLCs & the
proposed Limited Liability Partnership (LLP)
structure to
VC funds.
To grant tax exemption of capital gain for
registered VCF’s on exit
To remove the restriction on investment of 25% in
single VC undertaking by domestic & foreign VCF’s
To remove the minimum capitalization
requirement of Indian subsidiaries of SEBI
registered foreign VC investors.
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27. 
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Intro- Druva provides integrated data protection and
governance solutions for enterprise laptops, PCs,
smartphones and tablets. Its headquarters located in
Sunnyvale, caliotnia & pune. It’s a private company Founded
in 2007, Druva is one of the fastest growing backup/storage
startups
Case Study
Druva Software, a Pune-based start-up that makes
proprietary backup software solutions for laptops, has raised
$5 million in Series A funding (funding that follows seed
funding) from Sequoia Capital India and Indian Angel
Network (IAN).
The money will be used to expand the three-year old
company’s marketing and sales footprint overseas, including
in Europe and the US. So far, it has relied largely on Webbased channels to sell its products in those markets.
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80 per cent of data is duplicated,”. Druva, therefore,
developed a software that would allow companies to cut out
this duplication and enable laptops to work faster as well as
increase storage capacity
Druva had earlier raised seed funding from the Delhi-based
Indian Angel Network and Hong Kong-based Accord
International.
Druva was developing a continuous data protection product,
which is the next level of back-up technology, we decided
to fund them,” says Rehan Yar Khan, who represents IAN on
the Druva board.
Some of the company’s earliest clients include
NASA and the US Marine Corps. Druva Phoenix,
Khan says, is now beginning to gain traction in
the market
Jaspreet Singh
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Co-founder and CEO

29. Source: 5 July 2010
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32. Source – Thomson Reuters
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