B.K.

BIRLA COLLEGE OF ARTS, SCIENCE AND COMMERCE (AUTONOMOUS), KALYAN

MASTER OF COMMERCE [M.COM] PART II

(Banking & Finance)

SEM IV (2021-22)
A Synopsis On

“A Study on Growth of Venture Capital in India”

Submitted to,
B.K. BIRLA COLLEGE OF ARTS, SCIENCE AND COMMERCE (AUTONOMOUS), KALYAN

By

Vikas Prakash Gavali

Roll No: 02

Student ID: 41759

Email ID: vikaspg1305@gmail.com

Under the Guidance of

Dr. Vrinda Nishandar

 INDEX

1. Introduction

2. Literature Review:

3. Importance and Significance of the Study.

4. Objectives of the Study

5. Hypotheses.

6. Research Methodology

(a) Primary Data

(b) Secondary Data

(c) Sampling Methods and Sample size

7. Expected Contribution (Scope and Utility)

8. Chapter Scheme

Chapter No.1. Introduction

Chapter No.2. Literature Review

Chapter No.3. Research Methodology
Chapter No.4. Data Analysis
Chapter No.5. Conclusion & Suggestions

Bibliography
Appendix

Sign of the Student Sign of Supervisor

1. Introduction
One of the most significant determinants for economic growth is the formation and growth of
small and medium-sized enterprises (SMEs). Access to risk capital (equity capital) is frequently
mentioned as a requirement for SMEs and new venture start-ups to seek development prospects.
Young companies in the early stages of expansion generally have difficulty obtaining traditional
financing due to their limited life history and lack of consistent cash flows. Because these
resources are frequently either already utilized or insufficient, financing the firm using the
entrepreneur's money is usually not an option.
Furthermore, new enterprises that are rapidly growing are rarely able to compound the capital
required for rapid growth. Finally, equity financing is a better option for financing expanding
young firms’ investments and expansions than debt financing, which has the downside of raising a
company's financial risk due to amortizations and interest rates. The equity gap refers to the
difficulty of securing (or an insufficient supply of) growth capital for entrepreneurial enterprises.
Aside from the equity gap, small businesses with great development potential frequently face a
competence gap. The complexity of firm management develops as the organization grows from an
idea to a mature company, and new demands are constantly placed on the firm's management. The
venture capital business has established its place by meeting the demand for funds and expertise.
The ability to overcome these competency gaps is, in fact, a requirement for the venture capital
market to exist. Firms that specialize in co-investing equity with entrepreneurs to fund early stage
(seed and start-up) or expansion ventures are known as venture capital firms. To do so, they must
provide not just with expansion capital, but also with the essential expertise to assist the
entrepreneurial firm in growth.

2. Literature Review:
Jeong et al. (2020) investigated in his research paper how at various phases of development,
venture capital investment has an impact on a startup's long-term growth and success. This
research expands our knowledge of the impact of venture capital investing by looking into how
VC investment affects start-up success from the perspective of the original investment. Another
important finding of the study is that a start- up's absorptive ability early in its life cycle has an
effect on VC investment success.
Vanderhoven et al. (2020) Will Public Venture Capital Help Resilience in the Collective
Economy? The results of a social innovation fund Via the case analysis of Heavy Sound
Community Interest Company, this essay objectively examines the usage of public venture capital
programmes to finance and develop the social economy. They said that SIF support helped Heavy
Sound scale up the initiative in the short term, but more substantive scale-up could jeopardize the
success of the project and guarantee long-term survival is not possible.
Mahesh (2019) research was undertaken on the Challenges of Venture Capital Investment in India.
This research paper aims to illustrate the problems and challenges that Indian venture capital firms
face when it comes to financing. There is an impending need for extremely cost-effective,
high-quality goods, necessitating the right access to vital human resources to direct and track new
ventures, as well as the obligatory funds to finance them. Despite the current problems in India's
manufacturing infrastructure, the country looks forward to accelerated venture capital Investment.
Mishra et al. (2017) an attempt has been made to study the determinants of the syndication
approach used by Indian venture capital firms.. The findings revealed that investment scale, a VC
firm's previous experience and industry exposure, the amount of investment rounds, and the stage
of investment were the most important determinants of syndication decisions used by Indian
venture capital investors as a risk mitigation tool and to draw further capital in future rounds.
Tripathi et al. (2016) the factors that influenced VCPE funds' staging decisions in the
infrastructure business in India were investigated to see whether staging structures would help
overcome the issue of knowledge asymmetry. Staging was more common in younger
infrastructure companies early on in the process of growth, according to their findings. To reduce
the hold-up issue, staging was made more apparent in syndicated investments. Experienced
companies and international VCPE funds were less likely to stage their investments.
 3. Importance and Significance of the Study.

In India, the level of growth has not been found so promising and consistent due to lack of
financing for innovative ideas. To get the full advantage of economic reforms and to make the
Indian economy more competitive, it is high time that the catalytic role of Venture Capital must be
clearly understood.
This study will be of immense benefit to the Indian economy as it discusses the relationship
between venture capital, entrepreneur and venture capitalist. It will help us to understand the
structure of venture capital. These projects also create awareness about venture capital for creating
more and more entrepreneurs which help to develop the economy.

. Objectives of the Study

=

To know about the awareness of the investors towards venture capital in India.
wep,

To study the venture capitalist preference while investing in venture capital.

To know the importance level to entrepreneurs about venture capital.
To study the risk and return involved in venture capital.
PF

5. Hypotheses.
HO:- There is no significant difference between the VC investments in various industries.

H1:- There is a significant difference between the VC investments in various industries.

HO0:- Investors think that there is no relationship between risk and return while investing in
venture capital.
H2:- Investors think that there is a relationship between risk and return while investing in venture
capital.

H0:- The choice of stage by the venture capitalist is not an important issue while investing in
venture capital.
H3:- The choice of stage by the venture capitalist is Important while investing in venture capital.
6. Research Methodology
A) Data Collection
The project data is collect through primary and secondary source of data.

1. Primary Data: - The sample size data (primary data) collect through questionnaire
method. The primary data is collected from the general public.
2. Secondary Data: - The Secondary data includes journals, articles, published research
papers and various websites data.

B) Data Analysis:-
The project's primary data is analyze after sample data collection and secondary data is a comparison of
three years of data which help us to analyze growing and moving conditions of startups. These data
analyses help us to understand risk and return involved in venture capital..

7. Limitation of the Study

1. The data collected for the project study is a small group of respondents with a limited
sample size of 50.
2. Data and information collected from the respondents are based on their opinions and
knowledge. This may be subject to bias.
3. The Study considered only a few factors to analyze the perception of Individual or Firm
investors towards venture capital.
4. The study did not consider the factors like culture, caste and family size that affect the
perceptions towards the venture capital.
5. This study is restricted to India only, because respondents are Indian and secondary data is
based on the Indian economy.

8. Expected Contribution (Scope and Utility)

The study would help us better grasp venture capital financing in India, as well as its challenges
and opportunities. This paper examines the challenges and opportunities that entrepreneurs face
while working with venture capital assets, as well as the importance of venture capital funding in
the corporate world. An entrepreneur may benefit from the assistance of a venture capitalist in a
number of ways. Desirability of venture capital funding is largely based on the venture capitalists
ability to make managerial contributions to the firm. Long-term funding is not the same as venture
capital. A venture capitalist, on the other hand, invests in an entrepreneur's idea, nurtures it for a set
period of time, and then exits with the help of an investment banker. Every entrepreneur is ready to
approach Venture Capitalists but is unable to complete all of the necessary paperwork. Despite the
fact that venture capital is scarce, it is critical to the development of innovative creative ideas,

9. Chapter Scheme
Chapter No. 1. Introduction
Chapter No. 2. Research Methodology
Chapter No. 3. Review of Literature
Chapter No. 4. Data Analysis, Interpretation and Presentation
Chapter No. 5. Conclusion and Suggestion

Bibliography
Appendix