"Current Scenario of Venture Capital": Contemporary Issue On Seminar A Study On
"Current Scenario of Venture Capital": Contemporary Issue On Seminar A Study On
"Current Scenario of Venture Capital": Contemporary Issue On Seminar A Study On
A STUDY ON
www.studygalaxy.com
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Preface
The underlying aim of the seminar on contemporary issue as an
integral part of MBA program is to provide the students with practical
aspects of the organization working environment.
Such type of presentation helps a student to visualize and realize
about the congruencies between the theoretical learning in the
premises of college and actual followed by the organization. It gives
the knowledge of application aspect of the theories learnt in the
classroom.
The seminar project in Current scenario of Venture capital is a
complete experience in itself, which provide me with the
understanding. This has become as inspirable of my knowledge of
management being learned in MBA program.
INDEX
1.Introduction
2.Concept of venture capital
3.History
4.Role within venture capital firm
5.Key factor of venture capital
6.Advantages of venture capital
7.Method of venture capital financing
8.Process of venture capital
9.Venture capital scenario of India
10. Sector of Interested
11.Webliography / bibliography
I.
INTRODUCTION
VENTURE:
A business project or activity specially one that involves risk.
CAPITAL:
Fund employed in any business activity.
Most important factor of production.
No economic entity can function without capital.
VENTURE CAPITAL:
Venture capital is a type of private equity capital typically provided by
professional, outside investors to new, growth businesses
VENTURE CAPITALISTS:
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CONCEPT:
vvvv VENTURE
CAPITAL
Drives new
industries
VENTURE
CAPITAL
People oriented
Growth oriented
Exit oriented
Internationally
oriented
VENTURE
CAPITAL
Is risky but creates
wealth.
the equity of the company in return for the requisite funding. Equity finance
offers the significant advantage of having no interest charges. It is patient
capital that seeks a return through long-term capital gain rather than
immediate
and
regular
interest
payments.
Venture capital investors are exposed, therefore, to the risk of the
company failing. As a result the venture capitalist have to invest in
companies that have the ability to grow very successfully and give higherthan-average returns to compensate for the risk.
Venture Capital may be a viable source of financing for a business.
While they generally invest in businesses that are more established and
ongoing, some do fund start-ups. In general they tend to invest in hightechnology businesses such as research and development, electronics and
computers. Venture Capitalists deal more in large sums of money, numbering
into the millions of dollars, so they are generally well suited to businesses
that are going grand from the start or have grown and require gigantic
expansion
HISTORY
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Slow Growth in 1960s & early 1970s, and the First Boom Year in 1978:
During the 1960s and 1970s, venture capital firms focused their
investment activity primarily on starting and expanding companies. More
often than not, these companies were exploiting breakthroughs in electronic,
medical or data-processing technology. As a result, venture capital came to
be almost synonymous with technology finance.
Venture capital firms suffered a temporary downturn in 1974, when the
stock market crashed and investors were naturally wary of this new kind of
investment fund.1978 was the first big year for venture capital. The industry
raised approximately $750,000 in 1978.
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STRATEGIC ROLES
Serving Board
Business Consultant
Financier
SOCIAL/ SUPPORTIVE
Coach/ Mentor
Conflict resolver
.
NETWORKING ROLES
Management recruiter
Professional contact
Industrial contact
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enjoy the capital gain which is his main benefit. Otherwise, he will be losing
his entire investment.
Participation in management: Unlike the traditional financier or banker,
the venture capitalist can provide managerial expertise to entrepreneurs
besides money.
Since many innovations and inventions cannot be commercialized due to
lack of finance, venture capital finance acts as a strong impetus for
entrepreneurs to develop products involving newer technologies and to
commercialize them.
Venture capital has also gained in importance as a mechanism for the
rehabilitation of sick companies. Moreover, venture capitalists also assist
smaller units in upgrading their technology.
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CLEAR
OBJECTIVE
SUCCESS
NETWORK
DRIVE
PATIENCE
EXPERIE
NCE
MANAGEME
NT SKILLS
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ADVANTAGES
ENTREPRENEUR
ECONOMY
ORIENTED
INVESTOR
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WHAT DO VENTURE
INVESTING?
CAPITALISTS
LOOK
FOR
WHILE
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POST INVESTMENT
ACTIVIES/ EXIT
DEAL STRUCTURING
DUE DILIGENCE
SCREENING
DEAL ORIGINATION
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From the above table we can see that venture capital is continuously
growing in INDIA.
The venture capital sector in India is still at the crossroads and striving
hard to take off. In the recent past, many changes have been occurred in the
industry. They are:
Capital is pouring into private equity funds;
Average ticket size of VC investment is increasing;
First-generation entrepreneurs are finding it easier to
raise funds;
Investors are demanding non-financial value addition;
Most States are setting up regional VC funds;
VC firms are getting professionalised;
Incubation of entrepreneurs is increasing;
VC firms are acquiring specific industry focus; and
Competition is stretching valuations.
The industry can well leap into the high growth trajectory if it is given
the necessary boost and the Government and the venture capitalists take the
proper measures.
Unless the challenges facing the sector are rightly addressed, VC funding
cannot meet with the kind of success it has in the developed countries.
TRENDS OF VENTURE CAPITAL IN INDIA
2007 PE/VC Trends
31% of all investments fell into the US$10-25
million category
capital investments accounted for 25%
of the private equity deals (in volume terms).
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Value(US$M)
5995
2688
685
824
492
339
1380
PHASES
PHASE I
Formation of TDICI in the 80s and regional
funds as GVFL & APIDC in the early 90s.
PHASE II31
SECTORS OF INTEREST
Sectors of interest
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Services
and Mobile
Value-
Added
Services
(M-VAS).
However,
gone are
the
when
days
Venture
Capital
was
something
that was
meant only
for IT &
ITES
companies.
Within
the
Healthcare & Life Sciences industry for example, Clinical Research
Outsourcing (CRO) and Biotech companies are attracting the attention of
both specialist VC firms as well as sector-agnostic firms.
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Especially interesting to VCs are sectors that tap the rising consumer
spending in India. While means that they are more than willing to listen to
pitches from start-ups in sectors like Media, Financial Services, Food &
Beverages and Retail.
Hands on experience
The series of delegations of US VCs that The Indus Entrepreneurs (TiE)
and Silicon Valley Bank
led in the years preceding
2006 played an important
role
in
exposing
encouraging
and
Silicon
Indian
Sequoia
companies.
Capital,
of
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One of the key differentiators among the new breed of VCs is that they
include successful entrepreneurs - like Sanjeev Aggarwal and Ashish Gupta
of Helion Ventures, Alok Mittal of Canaan Partners and Avnish Bajaj of
Matrix Partners - among their investing teams. These VCs - who can truly
claim to have "been there and done that" (in several cases in the Indian
context as well) - can walk the talk in terms of "adding value beyond the
money".
CERTAIN OTHER FACTS:
High Growth in Technology and Knowledge based
Industries (KBI)
KBI growing fast and mostly global, less affected by
domestic issues.
Several emerging centers of innovation biotech,
wireless, IT, semiconductor, pharmaceutical.
Ability to build market leading companies in India thatserve
both global and domestic markets.
India moving beyond supplier of low-cost services to
higher-value products.
Quality of entrepreneurship on ascending curve.
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WEBLIOGRAPHY / BIBLIOGRAPHY
WEBLIOGRAPHY
www.google.co.in
wikipedia.org/wiki/Silicon_Valley
www.netvalley.com/svhistory.html
www.altassets.net/hm_glossary.php
www.vccircle.com
www.siliconvalley.com/ - 80k
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