venture capital (best)
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Transcript of venture capital (best)
Subject – Financial Markets And Institutions
Submitted To – Prof. Harjit Singh
Submitted By – Yash Vardhan and Govind Rai
Angel Financing
Venture Capital
Private Equity
PublicStock Markets
Self Finance / Bootstrapping
Debt / Bank Finance
Equity FinancingEquity FinancingNon-Equity FinancingNon-Equity Financing
Introduction
1012/7/2010 Venture Capital
TOPICTOPIC
What Is Venture Capital
Venture Capital is a financial capital provided to early satge, high potential, growth startup companies. The venture capital earns money by owing equity in the companies it invests in.
The concept of VC was formally introduced in India in 1987 by IDBI.
The government levied a 5 per cent cess on all know-how import payments to create the venture fund.
ICICI started VC activity in the same year
Later on ICICI floated a separate VC company - TDICI
Development of VC in INDIA
13
Top Active VC Firms In IndiaTop Active VC Firms In India
1. Helion Venture Partners Investing in technology-powered and consumer service businesses, Helion Ventures Partners is a $605 Mn Indian-focused, an early to mid-stage venture fund participating in future rounds of financing in syndication with other venture partners.
● Investment Structure: Invests between $2 Mn to $10 Mn in each company with less than $10 Mn in revenues.
● Startups Funded: Yepme, MakemyTrip, NetAmbit, Komli, TAXI For Sure, PubMatic.
Accel Partners Accel Partners
● Investment Structure: Invests between $0.5 Mn and $50 Mn in its portfolio companies.
● Startups Funded: Flipkart, BabyOye, Freshdesk, Book My Show, Zansaar, Probe, Myntra, CommonFloor.
Sequoia Capital India Sequoia Capital India
● Industries: Consumer, Energy, Financial, Healthcare, Outsourcing, Technology.
● Startups Funded: JustDial, Knowlarity, Practo, iYogi, bankbazaar.com
Canaan Partners Canaan Partners
● IndustriesIndustries: Technology- Advertising & Marketing, Big Data/Cloud, Consumer, Enterprise/SaaS, FinTech, Hardware, Healthcare – Biopharma, digital Health & MedTech.
● Startups FundedStartups Funded: Naaptol, Bharat Matrimony, iYogi, Happiest minds, mCARBON, CarTrade, Surewaves.
India has a new one-man venture capital fund
With eight investments in the past year in Indian and international companies, Tata has clearly hit the ground running. And except for three, all his investments are in internet-based ventures.
Here is a list of Tata’s personal investments, starting from the latest.
Stages of Financing
Seed Money
To prove a concept
(15-25L)
Extreme risk
Start Up
Provided to companies
(25-60L)
Very high risk
First Round
Manufacturing funds
(1-3cr)
High risk
Second Round
Working capital & expenses
(2-5cr)
Sufficiently high
Third Round
For newel profitable company
(2-10cr)
Medium
Forth Round
Bridge Financing for going public process
(100cr)
Low
Acquisition or buyout financing (10-100cr)
23l
Advantages Of Venture CapitalAdvantages Of Venture Capital
ECONOMYECONOMY ENTREPRENEURENTREPRENEUR
INVESTORINVESTOR
Economy Oriented Economy Oriented -
Helps in industrialization of the country
Helps in the technological development of the country.
Generates employment
Helps in developing entrepreneurial skills
Investor oriented-Investor oriented-
Benefit to the investor is that they are invited to invest only after company starts earning profit, so the risk is less and healthy growth of capital market is entrusted.
Profit to venture capital companies.
Helps them to employ their idle funds into productive avenues.
Entrepreneur oriented-Entrepreneur oriented-
Finance - The venture capitalist injects long-term equity finance, which provides a solid capital base for future growth.
Business Partner - The venture capitalist is a business partner, sharing the risks and rewards.
Alliances - The venture capitalist also has a network of contacts in many areas that can add value to the company.
Why it is hard to find a VC !!!
2812/7/2010
Venture Capital
VC can help in the rehabilitation of sick units.
VC can assist small ancillary units to upgrade their technologies
VCFs can play a significant role in developing countries
Provide financial assistance to people coming out of universities, technical institutes, etc
Future Prospects of VC in INDIA
2912/7/2010
Venture Capital
Initial public offer(IPOs) Trade sale Promoter buy
backAcquisition by
another company
Exit Route30l