It is just story of the man with the Idea and the man with money.

Venture capital finance is often though of as ‘the early stages of financing new and young enterprises seeking to grow rapidly.” Finance may be required for the start-up, development/expansion or purchase of a company.  This fund provided on high risk high return basis.

Equity Participation- Direct purchase share or Convertible Securities (Debenture, Bound etc.)  Long Term Investment- 7 to 10 years  Participation in management

Seed - to prove concept or idea Start-up - product development & market testing First stage - commercial production (manufacturing & sales) Second stage - expansion to scale (working capital) Third stage - expansion of profitable enterprise Last stage - preparation for going public

Securities & Exchange Board of India (SEBI) regulates both Domestic Venture Capital Funds (DVCFs) & Foreign Venture Capital (FVC) Investors. Income passes through to investors without tax when Trusts are registered under the Indian Trust Act & Venture Capital Companies Act FVCIs freely remit funds to India for investments in Indian venture capital undertakings (VCUs) & SEBI registered domestic venture capital fund (DVCF) Reserve Bank of India (RBI) give Grant general permission to start venture capital fund in India.

Snapshot of Indian Ve nture Capital Scenario
Total Invested ($ millions)
12000 10000 8000 6000 4000 2000 0 10000

20

80

250

500

1200

1100

1050

1

96 9

97 1

97 9

98 1

98 9

99 1

99 9

0 00 2

2

00 0

01 2

01 0

02 2 2

02 0

03 F

Year

07 0

( 08

t) as c re o

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