apna ppt vc

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INTRODUCTION

Venture capital means funds madeavailable for startup firms and smallbusinesses with

exceptional growth potential.

Venture capital is money provided byprofessionals who alongsidemanagement invest in young,

rapidly growing companies that havethe potential to develop intosignificant economic contributors.

VENTURE CAPITALISTS

GENERALLY

Finance new and rapidly growing

companies

Purchase equity securities

Assist in the development of new

products or services

Add value to the company through

active participation.

DIFFERENCE BETWEEN P/E &

VENTURE CAPITAL

PRIVATE EQUITY VENTURE CAPITAL

PE firms buy companies acrossall industries

VCs are focused on technology,bio-tech, and clean-tech.

PE firms almost always buy100% of a company in an LBO VCs only acquire a minoritystake – less than 50%.

PE firms make large investments– at least $100 million up intothe tens of billions for largecompanies.

VC investments are muchsmaller – often below $10million for early-stagecompanies.

PE firms use a combination of equity and debt.

VC firms use only equity

PE firms buy mature, publiccompanies

VCs invest mostly in early-stage– sometimes pre-revenue –

companies.

InitialMeetings

PrelimnaryProjectReview byVenture

Capitalist

Term SheetSigned byVentureCapitalist &

Promoters

DueDiligenceReview ofProject

Venture

Capitalist

with Funds

Promoters

Project

LegalDocuments/AgreementSigned

Investmentmade byVentureCapitalistin Project

Mentoring&Monitoringof Project

Divestment& ExitfromProject

Promoters

Venture

Ca italist

VENTURE CAPITAL INVESTMENT & EXIT

WHAT DO VENTURE

CAPITALISTS LOOK FOR

Growing market

Unique product

Sound business plan

Gross profit margin

• Seed financing

• Startup financing

• 1st stage financing

EARLYSTAGE

• 2nd stage financing

• Bridge financing

• 3rd stage financing (mezzanine)

EXPANTION

• Acquisition financing

• Leveraged buyout (LBO)

BUYOUT

STAGES OF VENTURE CAPITAL

VC investment process

Deal origination

Screening

Due diligence (Evaluation)

Deal structuring

Post investment activity

Exit plan

Exit route

Initialpublic

offer(IPOs)

Promoterbuy back

Acquisitionby anothercompany

Methods Of Venture Financing

Equity

Conditional loan

Income NoteOther Financing

Methods

Players inVenture

Capital Firms

TomPerkin

JohnDoerr

BobKagle

HenryMcCance

REGULATION OF VENTURE CAPITAL IN INDIA

VCF are regulated by the SEBI (Venture

Capital Fund) Regulations, 1996.

The regulation clearly states that anycompany or trust proposing to carry on activityof a VCF shall get a grant of certificate from SEBI.

The SEBI Act also makes it mandatory forevery domestic VCF to obtain certificate of registration from SEBI in accordance with the

regulations.

Hence there is no way that an Indian VentureCapital Fund can exist outside SEBI Regulations.

Registration of Foreign Venture Capital Investors(FVCI) is not mandatory under the FVCI regulations.

CRITERIA:

Not more than 25% of the corpus can be invested inone VCU

Investment in Foreign Companies subject to RBIguidelines

Shall not invest in associate companies

Minimum Investment of not less than Rs.5 lakhs

Top Venture Capital

Firms In India

1. Risk Capital Technology FinanceCorporation Ltd. (RCTC)

2. Venture Capital Fund (set-up underlong-term fiscal policy of Government of India)

3. Indus Venture Capital Fund (Private

Venture Capital fund)

4. Gujarat Venture Finance Ltd.(GVFL)

Cont…

5. Credit Capital Venture Fund(promoted by internationalfinancial agencies)

6. State Bank Venture Capital Fund(promoted by SBI)

7. Can Bank Venture Capital Fund

(promoted by Canara Bank)

8. Grindlays Venture Capital Fund(promoted by Grindlays Bank)

Venture capital funds

in India

VCFs in India can be categorized into followingfive groups:

1) Those promoted by the Central Governmentcontrolled development finance institutions.For example:

- ICICI Venture Funds Ltd.

- IFCI Venture Capital Funds Ltd (IVCF)

- SIDBI Venture Capital Ltd (SVCL)

2) Those promoted by StateGovernment controlleddevelopment finance institutions.

For example:- Punjab Infotech Venture Fund- Gujarat Venture Finance Ltd (GVFL)

- Kerala Venture Capital Fund PvtLtd.

3) Those promoted by public banks.For example:

- Canbank 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

QUESTIONSS????

Q) For how long do venture capitalists investin a business??

Q) Post VC investment??

Q) WHAT DOES VC looks for??

Q) What a project must have??

Q) What a VC does??

Venture capital beats private equity as

Indian start-ups attract millions of dollars

in funding

RECENT SCENARIO

Venture capital industry wise

segmentation

PRIVATE EQUITY VENTURE CAPITAL

VC Circle Survey: 12-13 To Be A GoodVintage Year For PE/VC Funds

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