The document provides an overview of venture capital, covering its definition, types of funding, and what venture capitalists look for in investments, as well as the process of funding and exit strategies. It highlights the importance of risk-taking in venture capital and the role of general partners and limited partners in managing funds. Additionally, it emphasizes the qualities of successful entrepreneurs and offers advice on fundraising and learning from rejection.

1. An Introduction to Venture Capital

2. Agenda for the next 2 hoursIntroductions What is Venture CapitalWhy VC?Types of FundingProcessWhat VC’s Look forExit strategyDiscussions

3. Edventures1A Learning and Development organisationExperimentorsOver 100 years of combined experience

4. Facilitator – Pradeep YuvarajGoal for the sessionRules for the sessionAbout

5. Where do I get money from?To start new businessGrow a businessPut a new factoryRevive a dying company?

6. Possible sources: Non-equityPersonal fundsPersonal debtGrants and awardsCustomer pre-salesVenture leasingReceivables financingBusiness loansIn-kind contributionsJoint venturesor

7. Sources: EquityAngelsThe “4Fs” – Friends, Family Father in law and FoolsCorporate direct investment

8. orHero of the day: Venture Capital

9. What is Venture CapitalType of Equity investmentAbove average or High returnsStory of the man with the idea and the man with the money

10. In other words… It is the business of employing capital ‘patiently’ to ‘maximizereturns’ while managing risks in a relatively high-risk venture Versus Simply ‘minimising risks’ for a surer fixed return

11. Why take risk?

12. Why is it better than all other sourcesSpirit of partnership Risk - Reward sharing Active participation and value addition Long term perspectiveInvestment and not assistance Returns linked to performance Expects high returns

13. Who become VC’s?IndividualsCorporationsPrivate firms

14. How a VC company runs?General partners (GPs) manage the fundCapital comes from institutional “limited partners” (LPs)Singularly focused: ROIGPs get an annual feeOnce LPs get investment back, GPs get a portion of the profitsLPs get the remaining profits

15. Venture Capital EconomicsGPLP 32%LP 1LP 4LP 2Management$100VC Fund IX, L.P.$10$10PortfolioCompany 1PortfolioCompany 10$10$10PortfolioCompany 2PortfolioCompany 9$10$10PortfolioCompany 3PortfolioCompany 8$10$10$10$10PortfolioCompany 4PortfolioCompany 7PortfolioCompany 5PortfolioCompany 6

16. Venture Capital EconomicsGPLP 3LP 1LP 4LP 2$20$180VC Fund IX, L.P.PortfolioCompany 1PortfolioCompany 10$100$35PortfolioCompany 2PortfolioCompany 9PortfolioCompany 8PortfolioCompany 3$40$25PortfolioCompany 4PortfolioCompany 7PortfolioCompany 5PortfolioCompany 6

17. When will VC’s Fund?Seed Capital Only ideasNo productSmall amountsCapital used Market researchSample ProductSet-up costs

18. Startup CapitalProduct development completedSample is already availableInitial marketing has been done<2 years

19. Early stage2-3 years in businessManagement in placeSales on riseVC could increase salesImprove productivityImprove efficiency

20. Expansion capitalCompany is establishedNext level of growthEnter new marketsSpecialized VC’s

21. Late stage/MezzanineImpressive sales and revenuesBroken even/profitableSecond level of management Capacity increaseRamp up marketing

22. Other typesRestructuringBridge capitalTurnaroundAcquisitionMerger

23. The process

24. The process….

25. Fundraising time lineInvestor PresentationsFinalDocumentation0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18Business Plan SubmissionsTerm Sheet NegotiationsFundingBudget 4-5 months, or more

26. After fundingMonitoring Board seatFinancial PerformanceAfter 3-7 years: ExitIPOSale backM&ASale to strategic investors

27. Fundraising LessonsNetwork to gains access to VCsDon’t get hung-up on confidentialityBe persistentBe humble yet confident, and always courteous and professionalEmbrace and learn from rejectionBe greedy in the long-run (any % of something > 100% of nothing!)

28. Believe In Your Idea!“We don't like their sound, and guitar music is on the way out.”Decca Recording Co., rejecting the Beatles in 1962“The wireless music box has no imaginable commercial value.”David Sarnoff Associates, in rejecting a proposal for investment in the radio in the 1920sBelieve In Your Idea!“Who the hell wants to copy a document on plain paper?”National Inventors Council, as told in 1940 to Chester Carlson, founder of XEROX“Many of our stockholders have asked me about this new invention by Alexander Graham Bell called the telephone. While we think it’s an interesting curiosity, there’s never going to be a market for that technology, and therefore we have declined the offer to take a license.”Chairman of Western Union, in its annual report from the late 1800sAttributes of a Successful EntrepreneurProblem solverDecisiveLeader & motivatorHumblePassionatePersistentOptimisticProfessionalHigh integrityCritical path doerImpatient / bias toward action (with analysis)Rejoices in others’ victoriesFocused on the long-term goal

29. Closing thoughts…Focus on the long-runWhat goes around comes aroundFriendships last longer than jobsDon’t let greed blind the objectiveMake the most of the experienceListen & learnFailure or rejection is what you make of it

30. Entrepreneurship…Entrepreneurship is a lifestyle choiceBalance your risk & returnSeize opportunitiesLife’s short, have fun

31. Discussions…

32. Thank You!+91-97-87- 55- 55- 44training@edventures1.com

33. www.edventures1.com