Venture capital is a form of private equity and refers to capital provided to early-stage, emerging firms that have high growth potential. This document discusses venture capital funding and its role in social entrepreneurship. It provides details on the venture capital process, types of funds, and what VCs look for in potential investments. Examples of social ventures like Grameen Bank that received VC funding are discussed, highlighting their success in alleviating poverty and empowering communities. While VC can motivate social initiatives requiring significant capital, the document notes that VCs primarily support experienced entrepreneurs and firms in high-tech sectors.

1. TEAM 6
VENTURE CAPITAL
AND
SOCIAL ENTREPRENEURSHIP

2. T H E N E X T B I G E N G I N E P A V I N G E C O N O M I C
G R O W T H
VENTURE CAPITAL FUNDING

3. VENTURE CAPITAL
 Money provided by investors to start up firms and small
businesses with perceived long-term growth potential.
This is a very important source of funding for start ups
that do not have access to capital markets.

4. UNIQUE FEATURES
Investment in high-risk, high-returns ventures
Participation in management
Expertise in managing funds
Raises funds from several sources
Diversification of the portfolio
Exit after specified time

5. TYPES OF VENTURE CAPITAL FUNDS
On the basis
of
Promoters
Central
Government
controlled
Development
Financial
Institutions
Public Sector
Banks
Foreign Banks or
Private Sector
Companies and
Financial
Institutions
State
Government
controlled
Development
Finance
Institutions

6. METHODS OF VENTURE FINANCING
Equity Conditional Loan
Income Note
Other Financing
Methods

7. STAGES OF VENTURE FINANCING
• Seed Money
• Start Up
• Growth (Series A round)
• Second Round
• Expansion
• Exit of Venture Capitalist

8. WHAT DO VENTURE CAPITALISTS LOOK FOR?
Business Potential
Company Background
Core Plan
Promoter Details
Management
Business Model
Valuation Expectation
Return Expected

9. HOW IS A BUSINESS PLAN PRESENTED?
*

10. VENTURE CAPITAL INVESTMENT PROCESS
1. Deal Origination
2. Screening
3. Due Diligence Evaluation
4. Deal Structuring
5. Post Investment Activity
6. Exit

11. TO DO NOT TO DO
 Business Consultations
 Management
Consultations
 Human Resources
 Additional Resources
 Internal Problems
 Equity Position
 Decision Making
 Milestones and Targets
VENTURE CAPITAL FUNDING
OR

12. MAJOR TRENDS IN VENTURE CAPITALIST
INDUSTRY
Latest
Trend
• Bio Technology Sector
Upcoming
Sectors
• BPO
• Financial Services
• Real Estate
All Time
Favorites
• Transport
• Logistics

13. VENTURE CAPITAL IN INDIA
Can Help in rehabilitation of Sick
Units
Can Assist Small Ancillary units
upgrade their Technology
Can Provide Financial Assistance
to Students coming out of
Universities and Institutes

14. CHALLENGES IN INDIAN SCENARIO
1. Not well understood by:
• Entrepreneurs
• Investors
• Government Agencies
2. Businesses were traditionally closely held family operations.
• The concept of selling out a company to a strategic investor or
rival was foreign

15. CONTINUED…
3. Recent years the growth of Venture Capital Business has been
drastically decreasing

16. CISCO: A LANDMARK CASE

17. CISCO: A LANDMARK CASE
 An American
multinational corporation
headquartered in San
Jose, California, United
States
 The world's leading
manufacturer, designer and
supplier of computer
networking products
Large corporations
Service providers :
Internet and telecom
service providers
Small and medium
businesses for their
operating networks
MAIN MARKET SEGMENTATION

18. TRACING THE JOURNEY
 1984
Established on a very tight budget.
 Late 1980’s
The commercial market for internetworking began to develop,
CISCO's reasonably priced, high-performance routers gained
recognition.
High rate of sales growth, but company was still short of cash.
Turned to a venture capitalist, Donald T. Valentine of Sequoia
Capital.

19. CONTINUED…
 February 1990
CISCO Systems went public (with a market capitalization of $224 million) and
was listed on the Nasdaq stock exchange.
 Early 1990’s
Rapid Growth As Networks Proliferate.
 1993-94
First Wave of Acquisitions, as it acquired Crescendo Communications.
CISCO hired talent from smaller, struggling networking companies which
were laying off personnel.

20. CONTINUED…
 Late 1990’s
CISCO Systems was the
undisputed king of the
networking world.
 Early 2000’s
CISCO's market value
surpassed $ 450
billion, making it the third
most valuable companies in
the world behind Microsoft
and General Electric Company.

21. THE OTHER SIDE OF THE COIN
 The VC however, required that the owners surrender to him a controlling
stake in the company.
 Mr. Valentine, thus, became chairperson and then hired an outsider, John
Morgridge, as the company's new president and chief executive officer.
 The new CEO also replaced the friends of the couple who were the back bone
of CISCO.
 Under the new CEO, the husband was given the title of chief scientist and the
wife was made head of customer services.
 However, later the wife did not get along well with the new CEO and so, she
was fired from her own company and the husband also quit.

22. VENTURE CAPITAL CONCLUSION
• Venture capital entrepreneurship and innovation have been closely
connected
• Though most of venture funds state that high technology is their priority only
firms started by experienced persons find support by VCFs.
• Capability for assessing venture projects continues to be a weak area
because of the lack of prior experience.

23. B E Y O N D C S R
SOCIAL ENTREPRENEURSHIP

24. AGENTS OF CHANGE
 Business Skills + Leadership Skills
= Economic and Social
IMPACT
• Adopt a mission to create and
sustain social value
• Recognize and relentlessly
pursue new opportunities
• Engage in continuous
innovation, adaptation, and
learning
• Exhibit a sense of accountability
to the served and for the
outcomes created.
Seizing
Overlooked
Opportunities
Improving
Systems
Environmental
Challenges
Social
Challenges
Inventing New
Approaches
Create Sustainable solutions for

25. GRAMEEN BANK
Dr. Muhammad Yunus

26. HOW IT STARTED OUTCOMES
 Bangladesh, 1975
 MORE THAN 60% OF THE
POPULATION BELOW POVERTY LINE.
 MAJORITY OF POPULATION OVER
AGE OF 7 , ILLITERATE
 Farmers, Craftsmen, Female
entrepreneurs needed cash flows to
come out of the vicious cycle of
poverty.
 Yunus realized the solution – Bank Loan
 After Dhaka Banks reject idea, Yunus
starts lending money to female
entrepreneurs.
 From 15000 borrowers in 1980
membership increased to 2.3mn in
2002
 The bank’s total disbursements
increased from US$498 in 1976 to
US$170mn in August 2002.
 95% of the borrowers were women!
 Loan repayment rate was 95%
 Activities were spread across 41,000
villages
GRAMEEN BANK- Dr. Muhammad Yunus

27. STRUCTURE
• Voluntary formation of small
groups of five people.
• Receives mutual, morally binding
group guarantees in lieu of the
collateral.
• At first only two members of a
group are allowed to apply for a
loan.
• Depending on their performance in
repayment the next two borrowers
can then apply and, subsequently,
the fifth member as well.

28. TAKE AWAYS…
 The bank as True Educator
 Women given equal access to
the schemes, proved not only
reliable borrowers but astute
entrepreneurs.
 Helped women raise their
status, lessen their dependency
on their husbands and improve
their the nutritional standards
of their family.
 Empowering people through
self employment and
entrepreneurship to eradicate
poverty.
“I OBSERVE THE POLICY OF THE COMMERCIAL BANKS
AND DO EXACTLY THE CONTRARY.
I BELIEVE ALL HUMAN BEINGS ARE POTENTIAL
ENTREPRENEURS”
-MUHAMMAD YUNUS,
NOBEL PRICE LAURETE

29. OUR TAKE
 Venture Capitalists, may prove to be motivation for the
initiatives undertaken for the betterment of the
society, requiring substantial capital and proper
implementation.
 Thus, nurturing Social Entrepreneurs.

30. REFERENCE
 www.rediff.com/money/2007/may/08vc.htm
 www.indianmba.com/faculty_column/fc159/fc159.html
 www.mbaskool.com/business-articles/finance/267-venture-
capital-funding-pros-and-cons.html
 www.antiventurecapital.com/venturecapital.html

31. CREDITS
 Anuj Khadria 09
 Arjun Sharma 11
 Ayush Wahi 12
 Esha Sharma 32
 Niharika Sareen 24
 Susanna Puthooran 47
 Vaani Malik 50