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  • 1. TOPIC:- VENTURE CAPITAL CLASS:-SYBFM PRESENTED TO:- PROF. DEBJANI SINGHA Chetana Hazarimal Somani College Of COM. & Eco. & Smt. Kusumtai Chaudhari College Of Arts
  • 2. Group Members Name Roll No. Megha Gosavi 214 Anil Jain 217 Neha Panchal 224 Yogesh Raut 232 Heena Tiwadekar 244
  • 3. Agenda  Concept  Definition  Origin And Development  Features  Stages  Features Of a VC Firm  Eligibility To Seek Venture Capital Funding  Steps In Seeking Venture Capital  The Venture Capital Investment Process  Indian Scenario
  • 4. Agenda continue………  Venture Capital Regulation In India  Venture Capital Fund In India  Advantages Of Venture Capital  Methods Of Venture Financing
  • 5. Concept Of Venture Capital  Venture capital is the capital invested in a business where the chances of success are uncertain.  It is term to describe the financing of startup and early stage business as well as businesses in “ turn around” situations
  • 6. Definitions  Venture capitalist is a person who make such investments.  Venture capital fund is a partnership or trust or a company that primarily invests the financial capital of promoters and other investors in enterprises that are too risky for the standard capital markets or bank loans
  • 7. Origin And Development Of Venture Capital Concept  VC concept is a US origin concept.  Organized VC fund was started in 1946 when American research and development corporation (ARD), a publicly traded, closed-end investment company was formed.  In 1958 for computer maker digital equipment corp was provided with start-up financing by ARD.  ARD was eventually profitable, providing its original investors with a 15.8% annual rate of return over its 25 year as an independent firm
  • 8. Features Of Venture Capital  Venture capital is usually in the form of equity or mix of equity debt.  Commercial success of funded venture is not tested and hence VC is a risk investment.  If successful, VCs can get extraordinary returns.  VC is not just a fund provider but also is involved in managing the envisaged growth of the firm.  VC are interested in capital gains and cash gains.
  • 9. Stages of venture capital Stage Capital Concept Purpose Concept & Idea development stage Seed Capital For product development and pilot plant. Commercial possibilities are tested at this stage. Implementation Start-up finance For commercial plant development and full fledged operations roll-out. Expansion Growth Capital To scale up operations. At this stage product is almost a tested success in limited markets. Other Forms Struggling and loss making Turn around financing Business process re-engineering, bail-out package. Stop-gap or intermediate stage Mezzanine financing Urgent need before completing formalities of public issue, term loan etc.
  • 10. Features Of a VC Firm  Investment in high-risk, high-returns ventures  Participation in management  Raises fund from several sources  Diversification of the portfolio  Exit after specified time
  • 11. Eligibility To Seek Venture Capital Funding  Strength and motivation of management teams  Clarity on product development strategies  Carefully defined target markets with possibility to scale-up in a big way  Innovation quotient in proposed product or idea
  • 12. Indian Scenario  In 1973 a committee on development of small and medium enterprises highlighted the need to foster venture capital as a source of funding new entrepreneurs and technology.  Government of India and guideline for venture capital funds were formulated in 1988.
  • 13. Venture Capital Regulation In India SEBI (VC funds) regulation,1996 are:-  Any company or trust or a foreign VC fund to carry on any activity as a venture capital fund should apply to SEBI.  The venture capital fund shall not carry any other activity other than that of a venture capital fund.  Minimum sum acceptable by VC fund from any investor is RS. 5 lakh.  Venture capital fund should not invest more than 25% corpus of the fund in one venture.  VC should not invest in the associated companies.
  • 14. Venture Capital Fund In India  ICICI venture funds management company limited  IFCI venture capital funds ltd  SIDBI venture capital limited  IL&FS group businesses  Gujarat venture finance ltd
  • 15. Advantages Of Venture Capital  To VC Fund investors  To Enterprises seeking VC funding  To economy
  • 16. Methods Of Venture Financing  Equity  Conditional Loan  Income Note  Other Financing Methods