Venture capital


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  • Term sheet is a letter of intent and may or may not be legally bindingTerm sheet terms give a summary of proposed principal terms of investmentTerm sheet is usually subject to satisfactory completion of due diligence reviews
  • Venture capital

    1. 1. Venture Capital<br />MFS Presentation<br />
    2. 2. Venture Capital<br /><ul><li>Venture capital means funds made available for startup firms and small businesses with exceptional growth potential.
    3. 3. Venture capital is money provided by professionals who alongside management invest in young, rapidly growing companies that have the potential to develop into significant economic contributors.
    4. 4. Venture capitalists raise money from investors and use it to fund businesses with innovative ideas that conventional moneylenders such as banks would not touch.</li></li></ul><li>Continued<br />A big chunk of the businesses funded by VCs will inevitably fail. But the ones that succeed do so spectacularly and give huge returns. Google would never have reached the market if it hadn’t found VC funding at the right time.<br />The VC industry in India is betting on everything from sanitation projects to backwater purification systems to service apartments and energy from rice husks.<br />venture capital in India has finally broken out of Silicon Valley’s shackles and gone pan-India to back water purifications systems (Waterlife India), sanitation projects (Saraplast), cotton trading solutions for farmers (Zameen Organic), education and even beauty salons (R&R Salons) and service apartments.<br />
    5. 5. Sabeer Bhatia has won several honors and awards. These include: "Entrepreneur of the Year," award by the venture capital firm Draper Fisher 1997.<br />Venture capital firms typically source the majority of their funding from large investment institutions such as fund of funds, financial institutions, endowments, pension funds and banks. These institutions typically invest in a venture capital fund for a period of up to ten years<br />
    6. 6. Venture Capital Assistance Seeking Process<br />
    7. 7. Advantages<br />It injects long term equity finance which provides a solid capital base for future growth.<br />The venture capitalist is a business partner, sharing both the risks and rewards. Venture capitalists are rewarded by business success and the capital gain. <br />The venture capitalist is able to provide practical advice and assistance to the company based on past experience with other companies which were in similar situations. <br />
    8. 8. Advantages (Cont.)<br /><ul><li>The venture capitalist also has a network of contacts in many areas that can add value to the company.
    9. 9. The venture capitalist may be capable of providing additional rounds of funding should it be required to finance growth.
    10. 10. Venture capitalists are experienced in the process of preparing a company for an initial public offering (IPO) of its shares onto the stock exchanges or overseas stock exchange such as NASDAQ.</li></ul> They can also facilitate a trade sale.<br />
    11. 11. Risk in each stage<br />
    12. 12.
    13. 13. Venture capital funds in India<br /> VCFs in India can be categorized into following five groups:<br />Those promoted by the Central Government controlled development finance institutions. For example:<br /> - ICICI Venture Funds Ltd.<br /> - IFCI Venture Capital Funds Ltd (IVCF)<br /> - SIDBI Venture Capital Ltd (SVCL)<br />
    14. 14. 2) Those promoted by State Government controlled development finance institutions.<br /> For example:<br /> - Punjab Infotech Venture Fund<br /> - Gujarat Venture Finance Ltd (GVFL)<br /> - Kerala Venture Capital Fund Pvt Ltd.<br />3) Those promoted by public banks.<br /> For example:<br /> - Canbank Venture Capital Fund<br /> - SBI Capital Market Ltd <br />
    15. 15. Top cities attracting venture capital investments<br />
    16. 16. Case Study<br />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). <br />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 Web-based channels to sell its products in those markets.  <br />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. <br />
    17. 17. Druva had earlier raised seed funding from the Delhi-based Indian Angel Network and Hong Kong-based Accord International. <br />Druva was developing a continuous data protection product, which is the next level of back-up technology, we decided to fund them,” says RehanYar Khan, who represents IAN on the Druva board.<br />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<br />
    18. 18. Successful Stories of VC<br />
    19. 19.
    20. 20. Indian Private Equity and Venture Capital Association (IVCA)<br />Indian Private Equity and Venture Capital Association (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. IVCA members comprise venture capital firms, institutional investors, banks, incubators, corporate advisors, accountants, lawyers, government bodies, academic institutions and other service providers to the venture <br />