4thunit
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4thunit Presentation Transcript

  • 1. Family & Non-familyFamily & Non-family EntrepreneurEntrepreneur
  • 2. Who are professionals?Who are professionals? • Who have specific body of knowledge • Have a value & general know how • Who manages professional mobility • Who are reliable & trustworthy in the sense of their performance.
  • 3. Elements of professionalismElements of professionalism • Responsibility • Skillful • Competency to retain & distribute information • Communicative • Integrity • Personal development of one self & of others
  • 4. Role of professionalsRole of professionals • To see the on going trend • To update their knowledge • To maintain the chain of professionals • Provides training • Competence development • Guiding the related establishment
  • 5. ProfessionalismProfessionalism Professionalism is a commitment to develop one’s skills & then applying them to resolve problems responsibly
  • 6. Family EntrepreneurshipFamily Entrepreneurship • Family Entrepreneurship: is defined as an ownership control by members of family in the form of its management by taking this to the generations ahead.
  • 7. DifferentiationDifferentiation On the basis of: • Degree of open mindedness • New practices • Impartial HRM • Organization oriented financial management • Decision making style
  • 8. VENTURE CAPITALVENTURE CAPITAL
  • 9. WHAT IS VENTURE CAPITAL?WHAT IS VENTURE CAPITAL? Venture capital is a type of private equity (PE’s). Venture capital is typically provided for early stage , high potential, growth companies in the interest of generating a return through an eventual realization event such as IPO. Venture capital typically comes from four generic sources: • Private venture capital firms • Individual investors generally referred to as “angel investors” • Corporations making strategic investments • Governmental sources.
  • 10. VENTURE CAPITALISTSVENTURE CAPITALISTS Venture capitalists comprise of professionals of various fields. They provide funds to these firms after carefully scrutinizing the projects. Their main aim is to earn huge returns on their investments, but their concepts are totally different from the traditional moneylenders. They Know very well if they may suffer losses in some projects, the other will compensate the same due to high returns. They take active participation in the management of the company as well as provide the expertise and qualities of a good banker, technologists, planner and managers. Thus venture capitalists and the entrepreneur literally act as partners.
  • 11. VENTURE CAPITALISTSVENTURE CAPITALISTS Venture capitalists are higher risk investors and, in accepting these higher risks, all they desire is a higher return on their investments. The venture capitalists manage the risk/ reward ratio by only investing in businesses that fit their investment criteria. A venture capitalist is a person or investment firm that makes venture investments, and these venture capitalists are expected to bring managerial and technical expertise as well as capital to their investments.
  • 12. FEATURES OF VENTUREFEATURES OF VENTURE CAPITALCAPITAL For New Entrant Continuous Involvements Mode of Investment Long Term Capital Hands-on Approach High Risk-Return Ventures Source of Finance
  • 13. ADVANTAGES OF VENTUREADVANTAGES OF VENTURE CAPITAL FUNDINGCAPITAL FUNDING As the venture capitalists are ready to lend their expertise and standing to the entrepreneur, the local groups and multinational companies can easily enter into joint ventures. Venture capitalists are also helpful to a large number of smaller units under which they are able to upgrade their technology to meet the demands of the major industrial units. Venture capitalists are also playing a significant role in tapping the potentiality of service sectors. Thus, venture capital is booming to exploit the potential of Indian economy.
  • 14. DISADVANTAGES OFDISADVANTAGES OF VENTURE CAPITALVENTURE CAPITAL Securing a deal with a VC can be a long and complex process. Person will be required to draw up a detailed business plan, including financial projections for which the entrepreneur may need professional help. Support from his local business link may be available for this. If he gets through the deal negotiation stage, he will have to pay legal and according fees whether or not he becomes successful in securing funds.
  • 15. VENTURE CAPITALVENTURE CAPITAL FUNDING PROCESSFUNDING PROCESS Investment Valuation Evaluation Deal Structuring Post Investment and Exit Deal Origination
  • 16. DIMENSIONS OF VENTUREDIMENSIONS OF VENTURE CAPITALCAPITAL 1. Equity Participation 2. Conventional Loan 3. Conditional Loan
  • 17. STAGES OF FINANCING OFFEREDSTAGES OF FINANCING OFFERED IN VENTURE CAPITALIN VENTURE CAPITAL 1. Seed Money (Concept stage) 2. Start-up 3. First-Round (launched) 4. Second-Round (funding WC) 5. Third-Round (increasing plant capacity) 6. Fourth Round (going public)
  • 18. TYPES OF FINANCINGTYPES OF FINANCING 1. Seed Financing 2. Start-up (primary sources) Angel Investors Venture Capitalists 3. First-Round (potential sources of financing) Trade Credit Small Business Administration (SBA) Government Assistance programs Commercial Banks 4. Second-Round
  • 19. ADVANTAGES OF VENTUREADVANTAGES OF VENTURE CAPITAL FUNDINGCAPITAL FUNDING Even in the situation when entrepreneur having a good project idea but no previous entrepreneurial track record to leverage the firm, handles customers and bankers, venture capital can help the entrepreneurs in successful launch of their projects. Rapid growth of technology across the globe has led to the growth of technology in India but indigenous technology has been slack due to unwillingness of the people to take entrepreneurial risks. Venture capital has gained importance as it solves the sickness of a company.
  • 20. GUIDELINES FOR VENTUREGUIDELINES FOR VENTURE CAPITAL COMPANIESCAPITAL COMPANIES The government of India has issued the following guidelines for various venture capital funds operating in the country: The financial institutions, SBI, scheduled banks and foreign banks are eligible to establish venture capital companies or funds subject to the approval as may be required from the RBI. The venture capital funds have a minimum size of Rs. 10 crore and a debt equity ratio of 1:15. If they desire to raise funds from the public, promoters will be required to contribute minimum of 40% of the capital. The guidelines also provide for NRI investment upto 74% on a non- repatriable basis. The venture capital firm should be independent of the parent organization.
  • 21. GUIDELINES FOR VENTUREGUIDELINES FOR VENTURE CAPITAL COMPANIESCAPITAL COMPANIES The venture capital funds will be managed by professionals and can be set-up as joint ventures even with non- institutional promoters. The venture capital funds will not be allowed to undertake activities such as trading, broking and money market operations they will allowed to invest in leasing to the extent of 15% of the total funds deployed. The investment on revival of sick units will be treated as a part of venture capital activity. A person holding a position of being a full time chairman, chief executive, or managing director of a company will not be allowed to hold the same position simultaneously in the venture capital fund/ company. The venture capital assistance should be extended to the promoters who are new, and are professionally or technically qualified with inadequate resources.