Venture capital involves providing long-term funding for startup companies and small businesses with high growth potential. It typically involves private equity investments and carries high risk but also high potential returns. Venture capital funds are established to raise money through various means and make investments according to regulations. While venture capital can provide large sums of financing for new companies, the process is complex and investors take an ownership stake, imposing some loss of founder autonomy. Top cities attracting venture capital in India include Mumbai, Bangalore, Delhi, and Hyderabad in sectors like IT, biotechnology, and financial services. Remedies to improve venture capital access include reducing regulations, improving management skills, and increasing market and infrastructure facilities.

1. VENTURE CAPITAL
Tenin s Thankachan
Presented By

2. What is venture capital?
 Venture capital means funds made available
for startup firms and small businesses with
exceptional growth potential.
Venture capital is long
term risk capital to finance
high technology projects
which involve risk but at the
same time has strong
potential for growth.

3. Definition
 The SEBI defined Venture Capital fund in its
regulation 1996 as ‘a fund established in the form
of a company or trust which raises money through
loans, donations, issue of securities or units as the
case may be & makes or proposes to make
investments in accordance with the regulations’.

4. FEATURES OF VENTURE CAPITAL
Long term investment:
Lack of liquidity:
High risk return:
Private equity:
Wide scope:
Equity participation:

5. ADVANTAGES OF VENTURE CAPITAL
 provide large sum of equity finance.
 Venture Capitalist are rewarded by business
success & the capital gain.
 Able to bring wealth and expertise to your
company
 The Venture Capitalist also has a wide network of
contacts.
 Providing additional funds.

6. DISADVANTAGES OF VC
 Lengthy and complex process (needs
detailed business plan, financial projections
and etc.)
 In the deal negotiation stage, you will have
to pay for legal and accounting fees
 Investors become part owners of your
business - founder loss of autonomy or
control

7. Problems facing by VC
 Requirement of an experienced management team.
 Requirement of an above average rate of return on
investment.
 Longer payback period.
 Uncertainty regarding the success of the product in
the market.
 Questions regarding the infrastructure details of
production.
 Skills and Training required.
 Time Period.
 Interference in Business:

8. Top cities attracting VC investments:

CITIES SECTORS
Mumbai Software services, BPO, Media,
Computer graphics, Animations,
Finance & Banking
Bangalore IT & Bio-technology
Delhi Software services, Telecom
Chennai IT , Telecom
Hyderabad IT & ITES, Pharmaceuticals
Pune Bio-technology, IT , BPO

9. VC industry wise segmentation
6.94
7.73
11.5
4.32
27.95
4.82
11.43
12.92
3.36
9.03
Percentage
IT & ITES
Energy
Manufacturing
Media& Ent.
BFSI
Shipping& logistics
Eng.& Const.
Telecom
Healthcare

10. VENTURE
CAPITAL
FUNDING
IN
INDIA

11. VC funding in India
VCFs in India can be categorized into following five
groups:
1) Those promoted by the Central Government controlled development
finance institutions. For example:
- ICICI Venture Funds Ltd.
- IFCI Venture Capital Funds Ltd (IVCF)
- SIDBI Venture Capital Ltd (SVCL)
2) Those promoted by State Government controlled development finance
institutions. :-For example:
- Punjab Infotech Venture Fund
- Gujarat Venture Finance Ltd (GVFL)
- Kerala Venture Capital Fund Pvt Ltd.

12. 3) Those promoted by public banks. :- For example:
- Can bank Venture Capital Fund
- SBI Capital Market Ltd
4)Those promoted by private sector companies. :-For example:
- IL&FS Trust Company Ltd
- Infinity Venture India Fund
5)Those established as an overseas venture capital fund. :-For
example:
- Walden International Investment Group
- HSBC Private Equity
- management Mauritius Ltd

13. Remedies taken for VC
 Reduce the rules and regulations of SEBI.
 Investment made on development of management and
employees through training, improving skills.
 Avoid venture capitalist in interference in Business
activity.
 Increasing market facilities.
 Provide more infrastructure facilities.

14. THE END