ANGEL INVESTMENT FIRMS

Angel capital fills the gap in start-up financing between "friends and family Angels typically invest their own funds Angel investment is a common first round of financing for high-growth start-ups Angel investments bear extremely high risk

A number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital

Financial Services and Institutions

Presented by Smita Mishra

Slide 1 of <#>

VENTURE CAPITAL FIRMS (VCs)

The company starts up and needs money to grow The VCs look at the business plan, and invest money in the company. The first round of money is called a seed round In return for the money it receives, the company gives the VCs stock in the company as well as some control over the decisions the company makes

Pre-money valuation and post-money valuation decides how much equity a VC takes
Other shareholders undergo share dilution

Financial Services and Institutions

Presented by Smita Mishra

Slide 1 of <#>

What do these banks have in common?

Gross NPA of Banks

Rs 2,36,245 crore (4.22%)

Rs 94,121 crore (2.36%)

March 11
Financial Services and Institutions Presented by Smita Mishra

Sept 13
Slide 1 of <#>

SECURITIES and ASSET RECONSTRUCTION COMPANY (SARC)

Bad loan, NPA sold

BANK

ASSET RECONSTRUCTION COMPANY (ARC)

As per RBI Notification No. DNBS.2/CGM(CSM)-2003, dated April 23, 2003, ARC performs the following functions :(i) Acquisition of financial assets (ii) Change or take over of Management / Sale or Lease of Business of the Borrower (iii) Rescheduling of Debts (iv) Enforcement of Security Interest

Transfer of acquired assets

Management Fee Diff in acquired and realised value

TRUSTS
Security receipts sold

Qualified Institutional Buyers (QIBs)

(v) Settlement of dues payable by the borrower

Financial Services and Institutions

Presented by Smita Mishra

Slide 1 of <#>

RBI as regulator for SARCs

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) Guidelines to define
Net worth and CAR (15%) for SARCs, NPA recognition and consequent provisioning for the SARCs, Norms for transfer of assets by banks to the SARCs

FDI in ARCs increased to 74% from 49%

Financial Services and Institutions

Presented by Smita Mishra

Slide 1 of <#>