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Venture Capital Final
Venture Capital Final
CIA - III
VENTURE CAPITAL
SUBMITTED BY: ARIHANT SETHIA (0911351) SURAJ KUMAR (0911322) AYUSH AGARWAL (0911307) ROHIT MAHESWARI (0911372)
VENTURE CAPITAL
Venture Capital
Long term risk capital to finance high technology
projects which involve risk but at the same time as high potential for growth.
Definition (VCC) A financing institution which joins an entrepreneur as a co-promoter in a project and share the risks and rewards of the enterprise
The term venture capital is understood in many ways.
Contd..
Venture capital is a form of equity financing especially designed for funding high risk and high reward projects with the objective of earning a high rate of return. 1.It promoted by technically or professionally qualified but unproven entrepreneur 2. It seeking to harness commercially unproven technology 3. High risk venture
Form of equity participation, convertible debt or long term loan High risk but high growth projects Commercialization of new ideas or technologies. (not for trading, agency, etc.) Joins as a co-promoter and shares profits and losses
Contd..
potential and control the company through the growth phases? Does the possible reward justify the risk? Does the potential financial return on the investment meet their investment criteria?
Disinvestment Mechanism
Objective of VCs to sell of the investments made by him at substantial
gains.
Objective of investment is not profit but capital appreciation at the time of disinvestment
Options available
Promoters buy back Public issue
Advantages (Contd..)
General advantages Intermediary between investors (high returns) and entrepreneurs
Development of economy
Acts as a cushion to support business borrowings New products/process
A Viable Idea
Business Plan Project Cost and Return
schemes A. Risk Capital Schemes of IFCI B. Technology Development & information company of India (TDICI) of ICICI C. SEED Capital Scheme of IDBI
(a) Andhra Pradesh Industrial Development Corporation Ltd. (APIDC)- VCs Ltd. (b) Gujrat Venture Finance Ltd. (GVFL) Funds Promoted by Public Sector Banks Such as Canara Bank VC Fund Private Agencies:- It includes as the: 1. Credit Capital Venture fund 2. 20th Century VC fund 3. India Investment fund 4. Indus VC fund 5. SBI Capital Venture Capital fund
in areas ensuring high and guaranteed returns such as tourism, hospitals, air transport, IT, Comm., etc. Difficulties in India: 1.The restrictive legal and financial framework is one of the main reason for the lack of development of venture capital. 2. There are no private pool of capital of finance risk venture in India.
Small companies have no access to share capital or long term debenture capital.
Need for growth:- India process a pool of young
educated and technically qualified entrepreneurs with real innovative mind. Vast potential of our country need to be properly tapped for continuous development.
THANK YOU!!!