Finlatics Investment Banking Experience Program - Project 3

A sector-neutral fund is a fund that invests in a variety of industries and sectors. This can aid investors in
minimizing risk and avoiding losses caused by market dynamics. Although it may appear to be an
enticing option for a fund manager. It demands investors to have a broad understanding of many
businesses. It also necessitates that the fund management be an expert in his or her profession, as a
sector-agnostic fund with a large number of unproductive assets will yield a very low rate of return for
the investor. For these reasons, I wish to establish a sector-specific fund. The term "sector-specific
funds" refers to funds that invest in a particular industry or sector. Since the majority of these private
equity funds' portfolios consist of investments in a single area. For the same reasons that they might
generate above-average profits, they are also regarded to be dangerous. These hazards can be mitigated
by conducting considerable study and then focusing on a specific industry. These funds also attract
investors with extensive knowledge and resources in a particular industry.

Among all the industries. My private equity fund would concentrate on the E-commerce and digital
media sectors. After covid-19 and the expansion of the abundance of available internet material,
individuals are increasingly drawn to consuming data and purchasing goods online. These particular
industries offer a great deal of potential and long-term profitability.

The following are some of the types of investors I would seek:

a) Subrata is an entrepreneur-turned-venture capitalist who joined Accel when the business he co-
founded, Erasmic Venture Fund, rebranded as part of Accel.

Subrata was the initial investor in CasaOne, Curefit, Flipkart (significantly purchased by Walmart),
Juspay, Moglix, Money View, Mu-Sigma, Myntra (acquired by Flipkart), Saipbox, Virident (acquired by
Western Digital), WIBMO (acquired by PayU), and a number of other category leaders. His skills and
experience gathered from all of these ventures can assist my PE Fund's start-ups with a wealth of
insight. b) Ekta Kapoor is one of India's and the world's most popular Television Serials Producers, Film
Producers, and Filmmakers. Other than television filmmaking Ekta Kapoor is also the Co-Managing
Director of Balaji Television Ltd., one of the country's largest privately held production companies. She
has created over fifty television series and over thirty Bollywood films. Companies entering the digital
media market can benefit greatly from all of this industry knowledge and contacts.
c) Ratan Tata, chairman of Tata Industries and an energetic industry leader, is an active angel investor in
India.

He has mentored and profiled a variety of startups, projects, and businesses by providing investments,
guidance, and more.

With expertise in companies such as Urban Clap, Xiaomi, Moglix, and Snapdeal, he is regarded as one of
the leading players in the angel investment community. His extensive portfolio and years of cultivated
relationships through tata industries will be a fantastic asset in growing the ventures in my fund, as well
as a source of goodwill and quality assurance.

Sachin Bansal is an Indian businessman. He is best known as the co-founder of Flipkart, which Walmart
acquired for S16 billion in 2018 (77 percent share). Throughout his nearly 11 years at Flipkart. Bansal
served as both CEO and chairman. Bansal left Flipkart in 2018 following the Walmart acquisition. He
established BACQ Acquisitions pvt. ltd., a venture capital firm with a focus on establishing and acquiring
firms in a variety of industrial verticals. Moreover, he has invested in Ola taxis. Orange-grey hue The
companies Unacademy and Teamindus.

e) Bhushan Kumar Dua is a film and music producer from India. He is the chairman and managing
director of T-Series, also known as Super Cassettes Industries Limited. He is well-known for his
Bollywood work. In the capacity of managing director. Kumar expanded the company's business by ten
percent to include electronics. CDs, audio/video cassettes and tapes, as well as film creation. The
Government of India's Electronics and Software Export Promotion Council honored him for this as well
as for popularizing Indian music internationally.

f) Premji Invest is a private equity fund that manages over S2 billion of Azim Premji's own wealth and his
family's wealth by investing in capital markets and picking minority holdings in start-ups. including
domestic e-commerce enterprises like Flipkart and mobile payment providers like Financial Software
and Systems of Chennai. Premji invest has also made investments in HealthCare Global Enterprises,
Myntra, Snapdeal, and Amagi Media laboratories. g)Mahindra Partners is the Mahindra & Mahindra
Group's private equity firm. It was created with the intention of fostering new firms in various industries.
In addition to providing financial support to its portfolio firms, Mahindra Partners seeks to foster their
growth through experience and coaching. There are investments in Zoomear.
With new businesses blooming daily. The average startup success rate is declining. That being said. The
selection criterion for successful startups must be tough. There are six stages in the company's lifespan.
My private equity fund would prioritize the first commercialisation and early growth phases. Even the
most amazing ideas require direction to comprehend the business ecology. Investing in a startup at an
earlier stage could facilitate its growth and yield substantial benefits.

Initial Commercialization Phase This is the second phase of an organization's life cycle. At this level, the
startup is still young, but it has moved beyond the ideation phase and is searching for a suitable sales
channel strategy for its operational product. The optimal product-market fit contributes to the growth
and profitability of the product. It is challenging to determine without the assistance of an expert. With
the assistance and skills of the investors listed. I plan to focus on startups at this time. From an investor's
point of view. This stage of a company's development is enticing due to the high risk that may be
accompanied with bigger returns. For instance. Sanjay Mehta's early investment in 0Y0 rooms yielded
280 times profits. The majority of my targeted investors are risk-takers and so likely to invest in early-
stage companies.

Initial Growth Phase

This is the third phase of an organization's life cycle. The startups have identified the optimal product-
market fit and are currently penetrating the market. The majority of my targeted HNWIs are first-stage
commercialization core investors, while the targeted family offices participate in both first-stage
commercialization and early growth stage. However, the early growth period is still my favorite. Due to
the larger ticket size of PE funds compared to direct investments, investors tend to take a different
approach when investing through PE funds. By pooling funds from multiple investors, PE funds can have
a greater impact on growth-stage funds, resulting in greater rewards.

Startup scouting is a crucial aspect of any successful corporate engagement with a startup. It is the
procedure of identifying, evaluating, and selecting the most promising startups for collaboration. In the
enormous realm of entrepreneurship, it is difficult for a PE fund manager to discover the appropriate
companies. Globally, the number of new businesses is always increasing. As demonstrated by the huge
increase in the number of new businesses in recent years.

Network-Driven Procurement Network-driven scouting is performed with the assistance of professionals

who are consistently engaged in this field. Investment bankers are an example of such a professional
Investment bankers assist in the screening process by selecting start-ups eligible for a specific fund,
thereby saving a great deal of time and money. A PE Fund can provide information such as the industry
and stage of the firm they wish to invest in. Institutional Recruitment Various institutions can assist
startups in accelerating their company concepts and models. By providing workspace, seed capital,
coaching, and training, incubators aid entrepreneurs in resolving some of the issues frequently involved
with starting a startup. Accelerators are programs designed to expedite the growth of early-stage
businesses or concepts. In general, an accelerator is a program with a predetermined duration of
between three and twelve months. It offers a combination of education, coaching, and networking, and
it frequently includes investment. It differs from other forms of funding and incubation, including angel
financing, grants, and incubators. Thus, these institutes can assist my private equity fund by bringing
start-ups to the optimal point of the business lifecycle at which I am willing to invest. The majority of
these institutes' enterprises are in the initial stages of commercialization. One of their responsibilities is
to assist startups in obtaining funding, therefore they are as dependent on private equity investors as
the investors are on them.

The initial phase is screening, or initial contact, if you will. This is the first phone call or meeting between
the management of the venture capital firm and the management of the startup company. Comparable
to the initial meeting of political figures. The initial phase in which pleasantries are exchanged. Top dogs
exchange business cards and get to know one another. The venture capital firm will evaluate risk,
market size, and industry to decide if the opportunity aligns with their business goals. A solid platform
for collaboration will provide safe file sharing and analytics capabilities to aid in such evaluations.
Approximately 15% of agreements never make it past this initial screening stage. Therefore, the odds
are against both the venture capitalist and the startup. Enterprise collaboration may modestly tilt the
chances in a favorable direction.

Measurement of the market

One of the most important responsibilities of an entrepreneur is to estimate the size of their market and
the market's potential value to their startup business. Without this information, you cannot develop a
sustainable company plan. or gain the respect of possible investors. The determination of market size is
crucial. It reveals to you, your partners, your staff, and your investors how much actual company
potential exists. It assists in determining the actual value of your business. This is essential knowledge,
even if you never intend to raise outside cash. Therefore, a startup that aims high and is capable of long-
term viability is chosen. Large market size would result in significant returns in the future, hence
increasing the likelihood of a trade sale. This draws investors since it provides them with a potential exit
strategy.
Growth and performance of the organization Analysis of a startup's growth potential and historical
performance is crucial for predicting the firm's future and valuing the company. Ideally, a venture capital
firm seeks out a startup that is functioning well and has significant future growth potential. This might
reassure the investor that the company will have the ability to grab a substantial market share, allowing
them to realize a return on their initial investment.