Project Reporton

Venture Capital Financing

To understand the financing of projects through venture financing

To learn the working of venture financing in India.

To analyse the merits and demerits of venture financing

To evaluate the venture financing

 To study various venture financing institutions that facilitate the entrepreneurial financing.

OBJECTIVE OF STUDY

Research design : exploratory study

Data source: secondary data

internet newspaper IVCA report

RESEARCH METHODOLOGY

VENTURE CAPITAL

An Undertaking Amount invested by the person/s to carry

out the newly established OR business

VENTURE CAPITAL

Venture capital is the financial support to young, rapidly growing companies/ individuals that have potential to develop into significant economic contributors by the Business men/ Group to create a product or service which has a unique idea

JJDC is the venture capital subsidiary of Johnson & Johnson

Venture capital means funds made available for start up firms and small businesses with exceptional growth potential

Long time horizon Lack of liquidityFinance new and rapidly growing companiesFinance to Smaller and Less Mature

companiesProvided at earlier StageParticipation in managementHigh risk

MEANING

Maximum utilization of available resources To bridge the gap b/w Capital and

Knowledge

Need of Venture CapitalTo Society/Economy To Venture Capital Undertakings To Investors

Features/Characteristics of Venture Capital

invests in venture capital undertaking in accordance with the regulations.

raised in a manner specified in the regulations, and has a dedicated pool of capital As per SEBI (Venture Capital Funds) Regulations,

1996Venture capital fund means a fund established in the form of a trust or a company including a body corporate and registered Under these regulations which A venture capital fund refers to a pooled investment vehicle that primarily invests the financial capital of third-party investors in enterprises

METHODS OF VENTURE CAPITAL FINANCING

The investors that put money into their funds became less aggressive during recession so it was harder for the VCs to raise money.

With less opportunities for getting ROI investors tend to scale back, adjust their investment focus and/or get more picky in funding companies.

The down market virtually closed the IPO market for emerging companies.

. Factors for success of VC

The Seed stageThe Start-up stageThe Second stageThe Third stageThe Bridge/Pre-public stage

common stages of venture capital

In India, venture capital funds (VCFs) can be categorized into the following groups:- 

Promoted by the Central Government controlled development finance institutions, for example: SIDBI Venture Capital Limited (SVCL) IFCI Venture Capital Funds Limited (IVCF)

  Promoted by State Government controlled development

finance institutions, for example: Gujarat Venture Finance Limited (GVFL) Kerala Venture Capital Fund Pvt Ltd. Punjab Infotech Venture Fund Hyderabad Information Technology Venture Enterprises Limited

(HITVEL)

Venture Capital Funds in India

Promoted by public banks, for example:Canbank Venture Capital FundSBI Capital Markets Limited

 Promoted by private sector companies, for

example:IL&FS Trust Company LimitedInfinity Venture India Fund

 Overseas venture capital fund, for example:

Walden International Investment GroupSEAF India Investment & Growth FundBTS India Private Equity Fund Limited

Taking the role of AAVISHKAAR

(as a venture capitalist)

DATA ANALYSIS

Shri Kamdhenu Electronics PrivateLtd

AAVISHKAAR’S ROLESKEPL was the second project funded by Aavishkaar

in April 2003 with a total investment of 18 lakhs in equity. Through this investment, Aavishkaar received a 26.62% stake in the company.

Aavishkaar has been working closely with SKEPL in improving financial discipline and cost control.

The team has been integral in developing the creation of an MIS system that has helped the SKEPL management team improve their internal processes and systems. Also, Aavishkaar has provided access to a network for business development. Aavishkaar also continually provides advice and networking support to SKEPL on an as needed basis, as well as working with SKEPL on negotiations with potential investors.

Based on various òbservation the following outcomes were identified:

Good business strategies� business development and negotiating partnerships� Building stronger management skills�with 26% Aavishkaar Networking,ownership Usefulness of product Behaviours/Actions:� Increased publicity� Decreased risk profile has improved credibility among �

dairy cooperatives Breakeven with profit potential within the next year�Ultimate benefits: Created a more efficient dairy sector� Time savings results in other income generating �

options Greater asset accumulation as dairy farmers own their �

animals

CONCLUSIONApplying Aavishkaar’s logic model to the

outcomes drawn from interviews, surveys and focus groups suggests that investing in SKEPL has had a positive social impact on the dairy farmers, and their communities.

It injects long term equity finance which provides a solid capital base for future growth.

The venture capitalist is a business partner, sharing both the risks and rewards. Venture capitalists are rewarded by business success and the capital gain.

FINDINGS

RECOMMENDATIONSThe VC should be easily available to the

young entrepreneurThe process of obtaining VC should be more

simplified and more easy to obtain.The new ideas and capability should be

entertained and not only the experience of the entrepreneur

THANK YOU