Venture capital ca convention - baroda - vishrut ghate - wro 0363204


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Venture capital ca convention - baroda - vishrut ghate - wro 0363204

  1. 1. Venture CapitalistVenture Capital firms are often limited partnershipsCompany PortfolioMost Venture Capital comes from a group of wealthy investors, investment banks and other financial institution.Downside of entrepreneurs.Most VC firms have different kinds of executives: general partners, limited partners, venture partners apart from associates and office staff. By:- Vishrut Ghate
  2. 2. Venture capital is not solely an injection of fundinto a new firm. -Input of skills. -Designing Market strategy -Organizing & Managing the firmVenture capital may be at any stage ofbusiness/production cycle By:- Vishrut Ghate
  3. 3. How do Venture capitalists generate money? Return on Investment from Portfolio Companies 100% 80% 60% 40% Return on 20% Investment from Portfolio 0% Companies -20% -40% A Ltd B Ltd C Ltd D Ltd E Ltd By:- Vishrut Ghate
  4. 4. How do Venture Capitalists select companies to invest in? In 2009, Flipkart has raised funding from venture capital funds Accel India . Tiger Global (US $10 million in 2010 and US $20 million in June 2011) By:- Vishrut Ghate
  5. 5. Financing Stage Period (funds Risk Activity to be financed locked in Perception years)Early stage 7 to 10 Extreme For supporting a concept orfinance Seed idea or R & D for product development.Start up 5 to 9 Very high Initializing operations .First stage 3 to 7 High Start commercial production and marketingSecond stage 3 to 5 Sufficiently Expand market & growing high working capital need.Later stage 1 to 3 Medium Market Expansion,finance acquisition & product development for profit making company.Buy out-in 1 to 3 Medium Acquisition financingTurnaround 3 to 5 Medium to Turning around a sick High company.Bridge Finance 1 to 3 Low Facilitating public issue. Table: Venture Capital- Financing StagesVishrut Ghate By:-
  6. 6. Investors Screening VentureManagement Fund SelectionProspective Investee Structuring Monitoring Exit By:- Vishrut Ghate
  7. 7. • Angel and angel clubs With average deals sizes from USD 100,000 to USD 500,000 they finance companies in their early stages. Examples for angel clubs are · Media Club, Dinner Club ,· Angels Forum.• Small and Upstart Venture Capital Funds They are also called as "Boutique firms". Their capitalization is about USD 20 to USD 50 million. Examples are: · Artemis Comaford· Abbell Venture Fund.• Medium Venture Funds They provide money for deals up to USD 250 million. Single funds have up to USD 5 billion under management. An example is Accel Partners. By:- Vishrut Ghate
  8. 8.  Large Venture Funds : They often operate internationally and finance deals upto USD 500 million .Examples are: ·AIG American International Group, 3i, Cap Vest Man. Corporate Venture Funds : These Venture Capital funds are set up and owned by companies. A company invests in a venture that is similar from its core business. Examples are: Oracle, Adobe, Dell. By:- Vishrut Ghate
  9. 9. Few reasons for which active Venture CapitalIndustry is important for India include:• Innovation• Job creation• Patient capital• Creating new industry clusters like Media, Retail. By:- Vishrut Ghate
  10. 10. • The Fund has been subscribed by Small Industries Development Bank of India (SIDBI), Karnataka State Industrial Investment & Development Corporation Limited (KSIIDC) & Karnataka State Financial Corporation (KSFC) in 1999.• It has returned 38% of the money subscribed by the three institutions.• The Fund has invested in 13 companies with investment of Rs 12.08 crore.• The cumulative turnover of the assisted companies is about 170 crore. By:- Vishrut Ghate
  11. 11. • ‘SIDBI’ is the apex Financial Institution for the Small Scale Sector.• The Bank has been investing in several Venture Capital Funds for investments in the SME sector.• These include funds such as India Leverage Fund, India Advantage Fund, and India Development Fund. By:- Vishrut Ghate
  12. 12. • Venture capitalists are also human beings with their own share of mistakes.• Some investors will overpromise you. ‘AVOID IT’.• Check the source of Venture capital firm.• They may get greedy and allow you to play with equity.• Do not get entangled with people who want a quick and easy way out. By:- Vishrut Ghate
  13. 13. • Do not seek love at first sight. Establish a comfort level.• Do not try to impress Venture Capitalist. Be Honest.• Consult Chartered Accountant before going to VC.• Do a Market research before meeting VC.• VC wants to hear that you have a potential customer.• VC is looking at the team before looking at the idea.• Know your competitive landscape. By:- Vishrut Ghate
  14. 14. By:- Vishrut Ghate