BY BHOJ REDDY ENGINEERING COLLEGE ( 2011-13 BATCH)

MINI PROJECT

Venture capital means money provided by investors to start up firms and small businesses who have innovative idea but lacks finance.

The main concept of venture capital is “no innovative concept shall meet its death for genuine need for finance for venturism”.

The concept of venture capital was formally introduced in India in 1987 by IDBI. ICICI started venture capital activity in the same year.

INTRODUCTION TO VENTURE CAPITAL

IDEA

“Money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns”.

DEFINITON

NEED FOR THE STUDY

The study helps in knowing the venture capital scenario in India, the opportunities for venture capital growth in India. The different stages in it, financing and the role of business plan in getting approval from venture capitalist. This gives us knowledge about outcomes of experiment through success and failure of previous venture that venture capitalist invest.

OBJECTIVES OF THE STUDY

To study venture capital industry in global scenario.To study the evaluation and need of venture capital industry in India.

It has been observed that venture capital is very secretive about their investment this is a major hindrance for data collection.

LIMITATIONS OF THE STUDY

High risk involved in venture capital

High technology used

Participation in management

Illiquid investment

FEATURES OF VENTURE CAPITAL

RULES AND REGULATIONS

As per Income tax Act 1961

As per S.E.B.I Act 1996

ADVANTAGES OF VENTURE CAPITAL

They can provide large sum of equity finance to person

who have innovative idea but lack funds.Venture capitalist provides practical advice and assistance

to the company.The business is not obligated to repay the money.High risk is characterized with high returns.

DISADVANTAGES OF VENTURE CAPITAL

Securing a deal in venture capital is long and complex process.

As a part of deal company may have to accept many restrictions given by venture capitalist.

Great financial pressure on firm.

KEY FACTORS FOR VENTURE CAPITAL IN INDIA

Knowledge about government changing policies.Quick response time.Knowledge about global environment.Good human resources.

VENTURE CAPITAL PROCESS

SEED STAGE

START UP STAGE

SECOND STAGE

THIRD STAGE

BRIDGE STAGE

Stages Risk perception Activity to be financed

The Seed-stage Extreme For supporting an idea or concept or R&D for product development.

The Start-up Stage Very high Initialing operations or developing prototypes.

The Second Stage High Start commercial production and marketing.

The Third Stage Medium Market expansion, acquisition, mergers, take over, development for products.

The Bridge/Pre-public Stage

low Market segmentation.

RISK PERCEPTION

“The study on venture capital” describes how small firms are getting funds either to start a new company or to bring new products to the market. The study shows how the concept of venture capital started globally and it provides key success factors for venture capital in in India. In short “Venture capital funding is next engine for economical growth for all countries in the World.”

CONCLUSION

BIBLIOGRAPHY

References:Books:Venture deals: Be smarter than your lawyer and venture capitalist by brad FeldInside secrets to venture capital by Brain E. Hill

Websites:www.entrepreneurs.comwww.thetimesofindia.com