Venture capital


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Venture capital

  1. 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. 2. Group Members Name Roll No. Megha Gosavi 214 Anil Jain 217 Neha Panchal 224 Yogesh Raut 232 Heena Tiwadekar 244
  3. 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. 4. Agenda continue………  Venture Capital Regulation In India  Venture Capital Fund In India  Advantages Of Venture Capital  Methods Of Venture Financing
  5. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 15. Advantages Of Venture Capital  To VC Fund investors  To Enterprises seeking VC funding  To economy
  16. 16. Methods Of Venture Financing  Equity  Conditional Loan  Income Note  Other Financing Methods