FINAL REPORT ON STUDY OF VENTURE CAPITAL IN INDIA
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Acknowledgement
I am deeply indebted to my Project Coordinator Prof for her valuable suggestion, able guidance and constant encouragement throughout the Project.
I would also like to thank all others who helped me directly and indirectly during this project.
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DECLARATION I, hereby hereby decla declare re that that the project project work work titled titled “ To Study the venture capital in India ” is original work done by me and submitted to the Punja Punjab b Tec Techni hnical cal Univer Universit sity y for the the ful fulfill illment ent of requir requireme ements nts for the award award of Master Master of Busine Business ss Admini Administr strati ation on (finance) is a record of original work done under the supervision of prof
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Certificate by the Guide
This is to certify that the project work titled “ To Studyof venture capital in india ” is a bonafide work of . is carried out in a partial fulf fulfil illm lmen entt for for the the awar award d of Mast Master er of Busi Busine ness ss Admi Admini nist stra rati tion on Management of Punjab Technical University under my guidance. This project has not been submitted earlier for the award of any degree/ diploma of any other Institute/ University.
Place: Date:
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CONTENTS: PARTICULARS
PAGE NO
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Introduction
6-26
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Venture capital India
27-33
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Literature Survey
35-36
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Research methodology
38
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Objectives
39-46
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Findings
48
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Limitations
50
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Suggestions
52
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Conclusion
54
Bibliography
55
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Annexure
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Introduction
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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 entity can function without without capital.
VENTURE CAPITAL: Venture capital is a type of private private equity capital typically provided by professional, outside outside investors to new, growth businesses businesses
VENTURE CAPITALISTS : A venture capitalist (VC) is a person who makes such investments, thes thesee incl includ udee weal wealth thy y inve invest stor ors, s, inve invest stme ment nt bank banks, s, othe otherr fina financ ncia iall institutions other partnerships.
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Venture capital is a means of financing fast-growing private companies. Finance may be required for: The start up, Development/ expansion, & Modernization Of a company. Growing businesses always require capital. There are a number of different ways to fund growth. These include the owner's own capital, arranging debt finance or seek seekiing an equi equitty par partner tner,, as is the the case case wit with vent ventu ure capi capittal. al. With venture capital, the venture capitalist acquires an agreed proportion of 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 capi capita tall that that seek seekss a retu return rn thro throug ugh h long long-t -ter erm m capi capita tall gain gain rath rather er than than immediate and regular interest payments. Venture capital investors are exposed, therefore, to the risk of the comp compan any y fail failin ing. g. As a resu result lt the the vent ventur uree capi capita tali list st have have to inve invest st 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 comp comput uter ers. s. Vent Ventur uree Capi Capita tali list stss deal deal mo more re in larg largee sums sums of mo mone ney, y, 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
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TASKS OF VENTURE CAPITALISTS: When venture capitalists invest in a business they : •
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Become part-owners and typically require a seat on the company's board of directors. They tend to take a minority share in the company and usually do not take day-to-day control. Professional venture capitalists act as mentors and aim to provide support and advice on a range of management and technical issues. Assist Assi st the the comp compan any y to deve develo lop p its its full full po pote tent ntia ial. l. The management support is the most important cont contri ribu buti tion on of a vent ventur uree capi capita tali list st.. Th Ther eree are are many many sour source cess of capi capita tal, l, bu butt on only ly a vent ventur uree capi capita tali list st can can provide experienced management input gained by helping many other companies successfully conquer the inevitable problems and growing pains.
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HISTORY Beginnings of modern venture capital: The earliest origins of venture capital can be traced back to the medieval Islami Islamicc mud mudara araba ba partne partnersh rship. ip. In terms terms of prote protecti cting ng the entrep entrepren reneur eur,, shar sharin ing g the the risk risks, s, loss losses es and and prof profit itss the the two two syst system emss of fina financ ncee are are remarkably similar. General Georges Doriot is considered to be the father of the modern venture capital industry. •
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In 19 1946 46,, Dori Doriot ot co-f co-fou ound nded ed Am Amer eric ican an Rese Resear arch ch and and Deve Develo lopm pmen entt Corp Corpor orat atio ion n (AR& (AR&DC DC)) with with Ralph Flanders, Flanders, Karl Compton and others, the biggest success of which was Digital Equipment Corporation.
When Digital Equipment went public in 1968 it provided AR&DC with 101% annualized Return on Investment (ROI). ROI). AR&DC’s $70,000 USD investment in Digital Corporation in 1957 grew in value to $355 million USD. It is commonly accepted that the first venture-backed startup is Fairchild Semiconductor , funded in 1959 by Venrock Associates. Associates. Venture capital investments, before World War II, II , were primarily the sphere of influence of wealthy individuals and families. Small Business Administration 1958. One of the first steps toward toward a professio professionall nally-man y-managed aged venture venture capital capital ind ndu ustr stry was the pass passag agee of the Small all Busi usiness ness Investment Act of 1958. The 1958 Act officially allowed the U.S. Small Business Administration (SBA) to license private "Small Business Investment Companies" (SBICs) to help help the the fina financ ncin ing g and and mana manage geme ment nt of the the sm smal alll
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entrepreneurial businesses in the United States. Passage of the Act addressed concerns raised in a Federal Reserve Board report to Congress that concluded that a major gap existed in the capital markets for long-term funding for growth-oriented growth-oriented small businesses. Facilitating the flow of capital through the economy up to the pioneering small concerns in order to stimulate the U.S. economy was and still is the main goal of the SBIC program today. Generally, venture capital is closely associated with technologically innova innovativ tivee ventur ventures es and mo mostl stly y in the United United States States.. Due to struct structura urall restrictions imposed on American banks in the 1930s there was no private merchant banking industry in the United States, a situation that was quite exceptional in developed nations. nations. As late as the 1980s Lester Thurow, Thurow, a noted economist, economist, decried the inab inabil ilit ity y of the the USA' USA'ss fina financ ncia iall regu regula lati tion on fram framew ewor ork k to supp suppor ortt any any merchant bank other than one that is run by the United States Congress in the form of federally funded projects. These, he argued, were massive in scale, but also politically motivated, too focused on defense, defense, housing and such such spec specia iali lize zed d tech techno nolo logi gies es as space space explor explorati ation on,, agriculture, agriculture, and aerospace. aerospace. US inve invest stme ment nt bank bankss were were conf confin ined ed to hand handli ling ng larg largee M&A transactions, the issue of equity and debt securities securities,, and, often, the breakup of indust industria riall concer concerns ns to access access their their pension pension fund surp surplu luss or sell sell off off infrastructural infrastructural capital for big gains. Not only was the lax regulation of this situation very heavily criticized at the time, this industrial policy differed from that of other industrialized rivals—notably Germany and Japan —which at that time were gaining ground in automotive and consumer electronics markets globally. However, those nations were also becoming somewhat more dependent on central bank and elite academic judgment, rather than the more diffuse way that priorities were set by government government and private investors investors in the United States.
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ROLES WITHIN A VENTURE CAPITAL FIRM
1. Venture capital general partners: partners: (Also known in this case as "venture capitalists" or "VCs") are the executives in the firm. In other words the investment professionals. Typical Typical career backgrounds vary, vary, but VCs come from either an operational or a finance background.
VCs VCs with with an op oper erat atio iona nall back backgr grou ound nd tend tend to be form former er chief executives at firms similar to those which the partnership finances and other senior executives in technology companies.VCs with finance backgrounds come from investment banks, M&A firms, and other firms in the corporate investment and finance space. 2. Limited partners: partners : Investors in venture capital funds are known as limited partners.. This constituency comprises both high net worth individuals and partners institutions with large amounts of available capital, such as state and private pension funds, funds, insurance companies companies,, and pooled investment vehicles, called fund of funds or mutual or mutual funds. funds. 3. Vent Ventur uree part partne ners rs and and en entr trep epre rene neur ur-i -inn-re resi side denc ncee (EIR (EIR): ): Othe Other r positions at venture capital firms include ventur venturee partn partners ers and (EIR).Ven Ventur turee partne partners rs "bring "bring in deals" deals" and entrepreneur-in-residence (EIR). receive income only on deals they work on (as opposed to general partners who receive income on all deals).
EIRs are experts in a particular domain and perform due diligence on potential deals. EIRs are engaged by VC firms temporarily (six to 18 months) and are expected to develop and pitch startup ideas to their host firm (although neither party is bound to work with each other). Some EIR's
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move on to roles such as Chief Technology Officer (CTO) at a portfolio company.
4. Associ Associate ate:: The "associ "associate ate"" is the typica typicall appren apprentic ticee within a venture capital firm. After a few successful year years, s, an asso associ ciat atee may may mo move ve up to the the "sen "senio ior r asso associ ciat ate" e" po posi siti tion on.. Th Thee next next step step from from seni senior or asso associ ciat atee is "pri "princ ncip ipal al," ," typi typica call lly y a part partne nerr trac track k position. Alternatively, there are many pre-MBA associate roles that are used solely for the purpose of deal sourcing, and the associate is usually expected to move on after two years.
STRATEGIC ROLES
Serving Board Business Consultant Financier
SOCIAL/ SUPPORTIVE • Coach/ Mentor • Conflict resolver
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NETWORKING ROLES Management recruiter Professional contact Industrial contact 14
FEATURES OF VENTURE CAPITAL The main features of venture capital are: Long-time horizon : In general, venture capital undertakings take a longer time time — say, say, 5-10 5-10 year yearss at a mini minimu mum m — to come come ou outt comm commer erci cial ally ly successful; one should, thus, be able to wait patiently for the outcome of the venture. Lack of liquidity : Since the project is expected to run at start-up stage for several years, liquidity may be a greater problem. High risk : The risk of the project is associated with management, product and operations.
Unlike other projects, the ones that run under the venture finance may be subject to a higher degree of risk, as their result is uncertain or, at best, probable in nature. nature. High-tech: Ventur Venturee capita capitall financ financee caters caters largel largely y to the the needs needs of first first-generation entrepreneurs who are technocrats, with innovative technological business ideas that have not so far been tapped tapped in the industrial industrial field.
However, a venture capitalist looks not only for high-technology but the innovativeness through which the project can succeed. Equity participation and capital gains : A venture capitalist invests his money in terms of equity or quasi-equity. He does not look for any dividend or other benefits, but when the project commercially succeeds, then he can enjoy the capital gain which is his main benefit. Otherwise, he will be losing his entire investment. 15
Participation in management : Unlike the traditional financier or banker, the ventur venturee capita capitalis listt can provid providee manage manageria riall expert expertise ise to entrep entrepren reneur eurss besides money. Since many innovations and inventions cannot be commercialized due to lack of finance, venture capital finance acts as a strong strong impetu impetuss for entrep entrepren reneur eurss to develo develop p produc products ts involv involving ing newer newer technologies and to commercialize them.
Factor to be consider capi capita tali list st isel iselec ecti tion on of proposal
by venture Inve Invest stme ment nt
. There are basically are basically fourelements in financing ofventures which are studied indepth by the venture capitalists. These are: 1. Management : The strength, expertise & unity of the of the key people key people on the board bringSignific board bringSignificant ant credibility to the company. The members are to be to be mature, Experienced Experienced possessing working knowledge of business and capable of taking potentially high risks. 2. Potential of capital gain An above average rate of return of about 30 40% is required by venture capitalists. The rate of return also depends upon the stage of the business cycle where funds are being deployed. Earlier stage, higher is the risk and hence the return.
3. Realistic Financial Requirement and Projections: Projections:The venture capitalist requiresa realistic view about the present health of the organization as well as future projections regarding scope, nature and performance performance the company in terms of scaleof operations, op
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erating profit erating profit and further costs related to product development through Research & Development.
4. Owner's Financial Stake: Stake:
The financial resources owned & committed by the Entrepreneur/ owner in the business including the funds invested by family, friendsand relatives play a very important role in increasing the viability of the Business. It isan important avenue where the venture Capitalist keeps an open eye.
ACCESSING THE VENTURE CAPITAL Venture capital has been in India for quite some time. The rejection ratio is very high, out of a 100 proposals received only 1 gets funded. The standard parameters used by venture capitalists are very similar to any investment decision. The only difference being exit. If one buys a listed security, one can exit at a price but with an unlisted security, exit becomes difficult. The key factors which they look for in 1. 2. 3. 4.
The Management The Idea Valuation Exit
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KE Y FACTORS SUCCESS:
FOR
THE
The key factors for the success of any project under the consideration of a venture capitalist are: • • • • • • •
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Clear and objective thinking; Operational experience, especially in a start-up; Firm grasp of numbers of numbers; People management skills; Ability to spot technology and market trends; Wide network of contacts; Know Knowle ledg dgee of all all face facets ts of bu busi sine ness ss — mark market etin ing, g, Finance and HR; Judgment to evaluate them on the basis of integrity and ability; Patience to pursue the final goal; Drive to guide budding entrepreneurs; and Empathy with entrepreneurs.
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ADVANTAGES OF VENTURE CAPITAL Venture capital has made significant contribution to technological innovations and promotion of entrepreneurism. Many of the companies like Apple, Lotus, Intel, Micro etc. have emerged from small business set up by people with ideas but no financial resources and supported by venture capital. There are abundant benefits to economy, investors and entrepreneurs provided by venture venture capital. Economy OrientedHelps in industrialization of the country Helps in the technological development of the country Generates employment Helps in developing entrepreneurial skills • • • •
Investor oriented•
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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: • Finance - The venture capitalist injects long-term equity finance, which provides a solid capital base for future growth. The venture capitalist may also be capable of
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•
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providing additional rounds of funding should it be required to finance growth. Business Partner - The venture capitalist is a business partner, sharing the risks and rewards. Venture capitalists are rewarded by business success and the capital gain. Mentor Mentoring ing - The ventur venturee capita capitalis listt is able able to provi provide de strategic, operational and financial advice to the company based on past experience with other companies in similar situations. Alliances - The venture capitalist also has a network of con onttact acts in many any are areas tha that can can add add valu valuee to the company, such as in recruiting key personnel, providing cont contac acts ts in inte intern rnat atio iona nall mark market ets, s, intr introd oduc ucti tion onss to strate strategic gic partne partners rs and, and, if needed needed,, co-inv co-invest estmen ments ts with with other venture capital firms when additional rounds of financing are required. Facilitation of Exit - The venture capitalist is experienced in the the proc proces esss of prep prepar arin ing g a comp compan any y for for an init initia iall public offering offering (IPO) and facilitating facilitating in trade trade sales.
ADVANTAGES
ENTREPRENEUR
ECONOMY ORIENTED
INVESTOR
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WHAT DO VENTURE CAPITALISTS LOOK FOR WHILE INVESTING? 1. A GROWING MARKET : Th Thee vent ventur uree capi capita tali list stss see see whet whethe herr the the company is targeting a substantial and rapidly growing market. Does the company have a reasonable chance to successfully enter the market and obtain a strong market position? 2. A UNIQUE PRODUCT : Is the the comp compan any y havi having ng a prop propri riet etar ary y or diff differ eren enti tiat ated ed prod produc uct? t? Does Does the the prod produc uctt offe offerr bene benefi fits ts ov over er exis existi ting ng products? Does it have patent or other proprietary protection to forestall competitors? 3. IPO CANDIDATE CANDIDATE OR ACQUISITION TARGET TARGET : Whether the company has the possibility of growing quickly and becoming an attractive acquisition target or IPO candidate? Venture capitalists are concerned about how they will realize liquidity and receive value for their investment. 4. SOUND BUSINESS PLAN : Is the company's strategy and business plan soun sound? d? Vent Ventur uree capi capita tali list stss expe expect ct to see see a well well-t -tho houg ught ht-o -out ut,, cohe cohere rent nt business plan. 5. SIGNIFICANT GROSS GROSS PROFIT MARGINS MARGINS : Can the product or service generate significant gross profit margins (40 percent or more)? Large profit margins give a company room for error and enhance its attractiveness for a possible IPO or acquisition.
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6. HOME RUN POTENTIAL: Finally, the venture capitalist wants to see the possibilit possibility y of hitting a "home run" run" by investing investing in the company. company. Most venture capitalists won't be interested unless the company can grow to at least $25 million in sales within five years. .
METHODS OF VENTURE FINANCING A pre-requisite for the development of an active venture capital industry is the availability of a variety of financial instruments which cater to the differ different ent riskrisk-ret return urn needs needs of invest investors ors.. They They sho should uld be accept acceptabl ablee to entrepreneurs as well. Venture capital financing in India took four forms:Equity Conditional Loan Convertible Debentures Cumulative Convertible Preference Share • • • •
Equity:-
All VCFs in India provides equity. When a venture capitalist contributes equity capital, he acquires the status of an owner, and becomes entitled to a share in the firm’s profits as much as he is liable for losses. The advantage of the equity financing for the company seeking venture finance is that it does not have the burden of serving the capital, as dividends will not be paid if the company has no cash flows. The advantage to the VCFs is that it can share in the high value of the venture and make capital gains if the venture succeeds.
Conditional Loans:-
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A conditional loan is repayable in the form of a royalty after the venture is able to generate sales. No interest is paid on such loans. In India, VCFs charged royalty ranging between 2-15%. Convertible Debentures & Cumulative Convertible Preference Shares:-
Convertible Debentures and Convertible Preference Shares require an active secondary market to be attractive securities from the investors’ point of view. In the Indian context, both VCFs and entrepreneurs earlier favored a financial package which has a higher component of loan. This was because of the promoter’s fear of loss of ownership and control to the financier and because of the traditional traditional reluctance and conservation conservation of financier financier to share in the risk inherent in the use of equity. Cumulative Convertible Preference Shares are particularly attractive in the Indian context since CPP shareholders do not have a right to vote. They are, however, entitled to voting if they do not receive dividend consequently for two years.
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PROCESS OF VENTURE CAPITAL
Venture capital investment activity is a sequential process involving five steps: 1. Deal origination 2. Screening 3. Evaluation or due diligence 4. Deal structuring 5. Post-investment activities and exit
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POST INVESTMENT ACTIVIES/ EXIT DEAL STRUCTURING
DUE DILIGENCE
SCREENING
DEAL ORIGINATION
1. Deal origination A continuous flow of deals is essential for the venture capital business. Deals may originate in various ways. Referral system is an important source of deals. Deals may be referred to the VCs through their parent organizations, organizations, trade partners, partners, industry associations, associations, friends etc.
The venture capital industry in India has become quite proactive in its approach to generating the deal flow by encouraging individuals to come up with with their their bus busine iness ss plans. plans. Consul Consultan tancy cy firms firms like like Mckins Mckinsey ey and Arthu Arthur r Anderson have come up with business plan competitions on an all India basis through the popular press as well as direct interaction with premier educational and research institutions to source new and innovative ideas. The short listed plans are provided with necessary expertise through people who have experience in the industry.
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2. Screening VCFs carry out initial screening of all projects on the basis of some broad criteria. For example the screening process may limit projects to areas in which the venture capitalist is familiar in terms of technology, or product, or market scope. The size of investment, geographical location and stage of financing could also be used as the broad screening criteria. 3. Evaluation or due diligence Once a proposal has passed through initial screening, it is subjected to a detailed evaluation or due diligence process. Most ventures are new and the entrepreneurs may lack operating experience. Hence a sophisticated, formal evaluation is neither possible nor desirable.
The VCs thus rely on a subjective but comprehensive, evaluation. VCFs evaluate the quality of the entrepreneur before appraising the characteristics of the product, market or technology. Most venture capitalists ask for a business plan to make an assessment of the possible risk and expected return on the the vent ventur ure. e. Foll Follow owin ing g po poin ints ts are are take taken n into into cons consid ider erat atio ion n whil whilee performing due due diligence. These includeinclude-
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BACKROUND MARKET AND COMPETITORS
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TECHNOLOGY AND MANUFACTURING MANUFACTURING
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MARKETING AND SALES STRATEGY
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ORGANIZATION AND MANAGEMENT
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FINANCE AND LEGAL ASPECT
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Investment Valuation The investment valuation process is aimed at ascertaiing an acceptable price for the deal. The valuation process goes through the following steps: • • •
Projections on future revenue and profitability Expected market capitalization Deciding on the ownership stake based on the return expected on the proposed investment
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The pricing thus calculated is rationalized after taking in to consideration various economic scenarios, demand and supply of capital, capital, founder' founder's/ma s/managem nagement ent team's team's track track record, record, innovatio innovation/ n/ unique selling propositions (USPs), the product/service size of the potential market, etc. 4. Deal Structuring Once the venture has been evaluated as viable, the venture capitalist and the investment company negotiate the terms of the deal, i.e. the amount, form and price of the investment. This process is termed as deal structuring.
The agreement also includes the protective covenants and earn-out arrangements. Covenants include the venture capitalists right to control the inve invest stee ee comp compan any y and and to chan change ge its its mana manage geme ment nt if need needed ed,, bu buy y back back arrangements, acquisition, making initial public offerings (IPOs) etc, Earnout arrangements specify the entrepreneur's equity share and the objectives to be achieved. Venture capitalists generally negotiate deals to ensure protection of their interests. They would like a deal to provide for: • • • • •
A return commensurate with the risk Influence over the firm through board membership Minimizing taxes Assuring investment liquidity The right to replace management in case of consistent poor managerial managerial performance.
The investee companies would like the deal to be structured in such a way that their interests are protected. They would like to earn reasonable return, minimize taxes, have enough liquidity to operate their business and remain in commanding position of their business. There are a number of common concerns shared by both the venture capitalists and the investee companies. They should be flexible, and have a stru struct ctur ure, e, whic which h prot protec ects ts thei theirr mu mutu tual al inte intere rest stss and and prov provid ides es enou enough gh incentives to both to cooperate with each other.
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The instruments to be used in structuring deals are many and varied. The objective in selecting the instrument would be to maximize (or optimize) vent ventur uree capi capita tal' l'ss retu return rns/ s/pr prot otec ecti tion on and and yet yet sati satisf sfy y the the entr entrep epre rene neur ur's 's requirements. The different instruments through which a Venture Capitalist could invest a company include: Equity shares, preference shares, loans, warrants and options. 5. Post-investment Activities and Exit Once the deal has been structured and agreement finalized, the venture capitalist generally assumes the role of a partner and collaborator. He also gets involved in shaping of the direction of the venture. This may be done via a formal representation of the board of direct directors ors,, or inform informal al influ influenc encee in impro improvin ving g the qualit quality y of market marketing ing,, finance and other managerial functions.
The degree of the venture capitalists involvement depends on his policy. It may not, however, be desirable for a venture capitalist to get involved in the day-to-day operation of the venture. If a financial or managerial crisis occu occurs rs,, the the vent ventur uree capi capita tali list st may may inte interv rven ene, e, and and even even inst instal alll a new new management team. Venture capitalists typically aim at making medium-to long-term capital gains. They generally want to cash-out their gains in five to ten years after the initial investment. They play a positive role in directing the company towards particular exit routes. A venture capitalist can exit in four ways: • • •
Initial Public Offerings (IPOs) Acquisition by another company Repu Repurc rcha hase se of the the vent ventur uree capi capita tali list st ? shar sharee by the the investee company
VENTURE CAPITAL SCENARIO IN INDIA 1972: The Committee on Development Development of Small Small and Medium Entrepreneurs, under the chairmanship of Mr. R. S. Bhatt, first highlighted venture capital financing in India. 1975: venture capital financing was introduced in India by the financial institutions with the inauguration of Risk Capital Foundation
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(RCF), sponsored by IFCI with a view to encouraging technologists and professionals to promote promote new industries. industries. 1976: The seed capital scheme was introduced by IDBI. 1983: The Technology Policy statement of the Government set the guidelines for technological self-reliance by encouraging the commercialization commercialization and exploitation of technologies developed in the country. Till 1984 venture capital took the form of risk capital and seed capital. 1986: ICICI launched a venture capital scheme to encourage new technocrats in the private sector in emerging fields of high-risk technology. 1986-87: the Government levied a 5 per cent cess on all know-how payments to create a venture capital fund by IDBI. ICICI ICICI also became a partner of the the venture capital industry industry in the same same year. 1988-89: •
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•
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The first attempt to frame comprehensive guidelines governing venture capital funds was. Even under these guidelines, only all India financial institutions, all scheduled banks including foreign banks operating in India, and the subsidiaries of the above were eligible to set up venture capital funds/companies. IFCI sponsored RCF was converted into the Risk Capital and Technology Finance Corporation of India Ltd. Unit Trust of India sponsored venture capital unit schemes. State Bank of India has a venture capital scheme operated through its subsidiary SBI Caps. ICICI flagged off a new venture capital company called Technology Development Technology Development and Information Company of India with the objective of encouraging new technocrats in the private sector in high-risk areas.
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•
The first scheme floated by Canara Bank had participation by World Bank. About the same time, two Stat Statee leve levell corp corpor orat atio ions ns,, viz. viz.,, Andh Andhra ra Prad Prades esh h and and Gujarat also took initiatives to promote venture capital funds and could obtain World Bank assistance. A foreign bank set up a Venture Capital Fund in 1987. In addition, other public sector banks have participated in the equity share capital of venture capital companies or invested in schemes of venture capital funds.
Several venture capital firms are incorporated in India and they are promoted either by financial institutions, such as IDBI, ICICI, IFCI, Statelevel financial institutions and public sector banks, or promoted by foreign banks/private sector financial institutions such as Indus Venture Capital Fund, Credit Capital Venture Fund, and so on. Hence, the total pool of Indian venture capital today stands over Rs 5,000 crore. VENTURE capital, the new-age finance, is gaining importance in the Indian economy as traditional financial institutions and commercial banks are hamstrung by inadequacy of equity capital, focus on low-risk ventures, conservative approach, and delays in project evaluation . Venture capital is also often described as "the early stage financing of new and young enterprises seeking to grow rapidly".
The Indian government sets up a venture capital fund 30
The Indian government has reiterated its commitment to the Indian software-driven IT industry by creating a National Venture Capital Fund for the Software and IT Industry (NFSIT). NFSIT, set up in association with various financial institutions and the industry, operates under the umbrella of the Small Industries Development Bank of India (SIDBI). The objective of the fund is to encourage entrepreneurship in the areas of software, services, dot.com and other IT related sectors in which India has inherent as well as acquired competency. The fund was launched by prime minister Atal Behari Vajpayee, who has emerged as a strong proponent of India's software-driven IT industry. The fund is expected to be a key component in addressing the rapidly growing demand for venture capital in India. The fund will be looking at supporting entrepreneurship in high growth sectors.Many state governments have already set up venture capital funds for the IT sector in partnership with local state financial institutions and SIDBI. These include Andhra Pradesh, Karnataka, Delhi, Kerala and Tamil Nadu.
STRUCTURE OF VENTURE CAPITAL INDUSTRY
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The Venture capital firms in India can be categorized into the following four groups:
All India Developmental Financial Institutions sponsored Venture Capital Funds promoted by the all-India development financial institutions such as Technol Technology ogy Develo Developme pment nt and Inform Informati ation on Compan Company y of India India Limite Limited(T d(TDIC DICI) I) by ICICI, Risk Capital Technology Financial Corporation Limited (RCTCF) by IFCI and Risk Capital Fund by IDBI.
sponso nsored red Ventur Venturee Capit Capital al Funds Funds State State Finance Finance Corpora Corporation tionss spo promoted by the state-level developmental financial institutions such as Gujarat Vent Ventur uree Capi Capita tall Limi Limite ted d (GVC (GVCL) L) and and Andhr Andhraa Prade Pradesh sh Indus Industr tria iall Deve Develo lopm pment ent Corporation’s, Venture Capital Limited (APIDC-VCL).
Bank-sponsored Bank-sponsored Venture Capital Capital Funds promoted by public sector banks such as Can finance and SBI Caps.
promot oted ed by the the forei oreign gn Priv Privat atee Vent Ventur uree Capi Capita tall Fund Fundss prom banks/private sector companies and financial institutions such as Indus Venture Capital Funds, Credit Capital Venture Funds and Grindlay’s India Development Fund.
Objectives of VCFs in India The objective of Indian venture Capital Funds are:
financing and development of high technology businesses,
to provide financial assistance for attaining commercial application of indige indigenous nous technol technology ogy or adapti adapting ng import imported ed technol technology ogy for wider wider domestic application,
to provide risk capital to first generation entrepreneurs for setting up industrial projects and to accelerate the pace and quality of technological innovations for products having application in industry, agriculture, health, energy and other areas beneficial to the development process in India.
32
Major player of venture capital India
IDBI Venture Capital Fund
This was establish established ed in1986 with the objective objective to finance finance projects projects whose requirements range between Rs. 5 lakhs to 2.5 crores. The promoters’ stake should be at least 10percent for the ventures below Rs. 50 lakhs and 15percent for those above 50 lakhs. Financial assistance is extended in the form of unsecured loans involving minimum legal formalities. Interest at concessional rate of 9percent is charged during technology development and trial run of production stage and it will be 17percent once the product is commercially traded in the market by the financially assisted firm. IDBI venture capital funds extends its financial assistance to the ventures likely to be engaged in the fields of chemicals, computer software, electronics, bio-technology, non-conventional energy, food products, refractories and medical equipments.
Technology Technol ogy Developm Development ent and Informa Information tion Compan Company y of India India Limited (TDICI)
This This ventur venturee Capita Capitall fund fund was jointl jointly y floate floated d by Indust Industri rial al Credit Credit & Investment Corporation of India (ICICI) and Unit Trust of India (UTI) to finance finance the projec projects ts of profes professio sional nal technoc technocrat ratss who take take initi initiati ative ve in desi design gnin ing g and and deve develo lopi ping ng indi indige geno nous us tech techno nolo logy gy in the the coun countr try. y. Technology Technology Development Development and Informati Information on Company Company of India Limited Limited (TDICI) was launched with an authorized capital base of Rs. 20 crores and the same was targeted to be increased to Rs. 40 to 50 crores. TDICI favours the firms seeking financial assistance for developing information tech technol nolog ogy, y, mana managem gemen entt cons consul ulta tanc ncy, y, phar pharma maceu ceuti tical cal,, vete veteri rina nary ry biological, environmental, engineering, non-conventional sources of energy and other innovative services in the country.
Unit Trust of India (UTI)
In 1988 1988-9 -99 9 UTI UTI setset-up up a vent ventur uree capi capita tall fund fund of Rs. Rs. 20 cror crores es in collab collabora oratio tion n with with ICICI ICICI for foster fostering ing indust industria riall develop developmen ment. t. TDICI TDICI established by UTI jointly with ICICI acts as an advisor and manager of the fund. UTI launched venture capital unit scheme (VECAUS-I) to raise resources for this fund. It has set up a second venture capital fund in
33
Marc March h 1990 1990 with with a capi capita tall of Rs. Rs. 100 100 cror crores es with with the the obje object ctiv ivee of financing green field ventures and steering industrial development.
Risk Capital and Technology Finance Corporation Ltd. (RCTFC)
IFCI IFCI had sponsored sponsored in 1985, 1985, Risk Risk Capita Capitall Founda Foundatio tion n (RCF) (RCF) to give give positive encouragement to the new entrepreneurs. RCF was converted into RCTF RCTFC C on 12th 12th Janu Januar ary, y, 1988 1988.. It prov provid ides es both both risk risk capi capita tall and and technology finance and roof to innovative entrepreneurs and technocrats for their technology oriented ventures. Small Industrial Development Bank of India (SIDBI) Small Industrial Development Bank of India (SIDBI)has decided to set-up a vent ventur uree capi capittal fund und in July uly 1993 1993,, excl exclus usiivel vely for supp suppor ortt to entrepreneurs in the small sector. Initially a corpus has been created by setting apart Rs. 10 crores. The fund would be augmented in future, depending upon requirements.
Andhra Pradesh Industrial Development Corporation (APIDC)
APIDC Venture Capital Ltd. (APIDC-VCL) was promoted by APIDC with an authorized capital of Rs.2 million on 29th August 1989. Its main objective objective is to encourage encourage technology-ba technology-based sed ventures ventures particularl particularly y those started by first generation technocrat entrepreneurs and ventures involving high risk in the state of Andhra Pradesh.
Gujarat Venture Finance Limited(GVFL)
GVFL GVFL has has been been prom promot oted ed by the the Guja Gujara ratt Indu Indust stri rial al Inve Invest stme ment nt Corporation Limited (GIIC) in 1990, to provide financial support to the ventures whose requirements range between 25 lakhs and 2 crores. Total corpus of Rs. 24 crores of the referred venture capital fund was cofinanced by GIIC, state financial corporation, some private corporates and World Bank. The firms engaged in biotechnology, surgical instruments, conservation of energy and food processing industries are financed by GVFL.
34
Commercial Banks Sponsored Venture Capital Funds
State Bank of India, Canara Bank, Grindlays Bank and many other banks have participated in the venture capital fund building Industry in order to provide financial assistance to the projects associated with high risks. SBI venture capital is monitored through SBI capital markets. Canbanks venture capital functions through Canbank. Financial services and India Investment Fund represents the venture capital launched by Grindlays Bank
35
Literature Review
36
Literature Review According to Chary, (September 2005) There has been a plethora of literature on venture capital finance, which is helpin g the practitioners’ viz., venture capital finance companies and fund manage for better understanding understanding the role of venture capital in economic development. There ar e number of studies on the venture capital and activities of venture capitalists in d evelopedcountries. According to Vijayalakshman & Dalvi,( Dalvi,((Jan., 2006)
Whenever Indian policy makers have to encourage any industry. The usual pra ctice isto grant that the industry tax breaks for a limited period. This definitely acts as a positive incentive for that industry. However, what is required is a throughunde rstanding of the industry requirement framing and implementation of aggregativestr ategy for its development. VC funds are not even registered with SEBI i n spite of all the benefit available. VC industry is one, which will today prepare a base for astrong tomorrow. What is need for the development of VC industry is not only tax breaks but simpler procedures legislation for simplified exit form investm ent, moretransparency and legal backing to participate in business amongst other things.
According to Kumar, (July, 2005) One of the integral aspects of venture funding is venture capitalist's involve ment withthe entrepreneurial team. The relationship through broad interaction was e xplored byRosenstein (1988). A comparison was drawn between small and large fir ms withregard to board interaction. While it is important in large firms the relative power of small conventional firms, board interaction generally is undermined. Rose nstein et. a.(1993) studied the finer aspects of boards in the venture funded compan ies in theUSA. From 98 candidates in the sample, the study attempted to bring out t 37
he changesin the board size, board composition and control and their relation to va lue added tothe funded unit. The empirical analysis yielded results wherein the size of the boardincreased boardincreased after venture funding, indicating more transparency in board operations. Through a case based approach Lloyd et. al. (1995) explored the aspect of deal structuring and post investment staging of venture capitalists through venture
According to Mishra, (July 2004)
There is abundant empirical research conducted in developed countries which addre ssthe relative investment evaluation criteria taken into account in the screening pr ocessfor new venture investment proposals. Zopunidis (1994) provides a useful su mmaryof the previous research in this field. The identification of selection criteria has beenresearched using different methodologies such as simple rating of criteria (perpetualand deal specific responses) Knight, 1986; Dixon, 1991; Hall and Hofer, 1993; Rah,Jung and Lee, 1994), construct analysis (Fried and Hisrich, 1994), verb al protocols(Zhacharakis protocols(Zhacharakis and Meyer, 1998), and quantitative compensatory models (Muzyka,Birley and Leleux, 1996; Shepherd, 1999). Multi methods (case analysis, study of administrative records, published interviews, questionnaire and personal i nterviews)approach has also been used (Riquelme, 1994) to enhance understandin g of investment criteria and also extend it to other aspects of investment process l ike dealstructuring and divestment.
38
RESEARCH METHODOLOGY
39
Research Methodology
Acc. to Kerlinger, “Research design is the plan structure & s t r a t e g y o f invest investiga igation tion conceiv conceived ed so as to obtain obtain answer answerss to to research questions and to control varianc Research design:-
Exploratory research
Data collection: -
secondary data
Secondary data is the data which is already collected bysomeone and complied For different purposes different purposes which are used in research for this study. It includes:Internet •
•
Magazine
•
Journal
•
Newspaper
40
Objective of the Study •
To find out the venture capital investment volume in India.
•
To study the problem the problem faced by venture capitalist in India.
•
To study the future prospects of venture capital financing
OBJECTIVE NO 1 To find out the venture capital investment vol in india Method of financing 41
Instrument
equity share Redeemable preference share Nonconvertible debt Convertible instrument Other instrument Total
Rs million 6318.12 2154.46 873.01 580.02 75.85 10,000.46
% 63.8 21.54 8.73 5.8 0.75 10 0
Interpretation: Interpretation:
This diagram shows the venture capital financing in equity shareand sec ondly they invest in redeemable preference shares to get higher returns
42
Contributor of funds Contributor Foreign institution investor All India financial institution Multilateral Development agencies Other banks Private sector Foreign investor Public sector Nationalized bank Non resident Sate financial institution Other public Insurance co Mutual funds Total
Rs mm 13426.47 625 2 .90 2 133 .64 1541 .00 412.53 5 70 324.44 278.67 235.5 2 15 115.52 85 4.5 25595.17
% 52 .46 24 .43 8.34 6.02 1.61 2.23 1.27 1.09 0.92 0.84 0.45 0.33 0.02 100.00
Interpretation: Interpretation:This table shows the highest contribution of fund FII and secondlyAIFI to develop the Industry. Financing by investment stage
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Investment in industry
Contributors
Rs.
%
Million
Industrial Products and Machinery Computer Software Service Consumer Related Medical Computer Hardware System Food and Food Processing Tel. and Data Communication Biotechnology Other Electronics Energy Related Others Total
2,956.67
23.54
2,508,87 1,381.49 817.48 735.41 718.56 417.89
19.98 10.20 6.50 5.86 5.72 3.33
448.77 426.06 229.56 1,865.09 12,559.85
3.56 3.39 1.82 18.85 100
Investment by Industry As in the previous year, the maximum investment has been made in industrial products and machinery followed by investment in computer software and service. There is an inte intere rest stin ing g chang changee here here comp compar ared ed to the the previ previou ouss year year.. In 199 1998 8 the the tota totall of the the investments in computer software and hardware put together exceeds investments in indust industria riall produc products ts and machin machinery ery.. In the previo previous us year, year, the total total invest investmen mentt in industrial products and machinery exceeded that in the computer industry. This is a clear indication that investment in the IT industry, as a whole is attracting greater attention, compared to other industries. This is in keeping with global trends.
44
Investment by Stages of Financing
A sum of Rs.5, 146.40 million, which is almost 41 percent of the total venture capital investment of Rs. 12,559.85 million, has been invested in start-up projects, followed by Rs. 4,478.60 million in later stage projects, Rs. 2,208.39 million in other early stage projects, Rs. 643.51 million in seed stage projects and only Rs. 82.95 million in turnaround projects.
Industry wise wise Investment Investment
Investment Stages
Rs. Million Start-up Stage Later Stage Other Early Stage Seed Stage Turnaround Financing Total
5,146.40 4,478.60 2,203.39 643.51 82.95 12,559.85
The average amount of investments per project makes an interesting study. It is Rs. 8.04 million per project in the seed stage, Rs. 9.21 million per project in the turnaround stage Rs. 14.50 million per project in the startup stage, Rs. 18.72 million per project in the other early stage and Rs. 26.98 million per project in the later stage. This shows that the average investment per project is the maximum in the later stage. This is as expected, since later stage projects generally require larger amounts of finance. Seed stage investments generally require smaller investments per projects. These averages also show that not only are the number of investments in turnaround projects minimal, the amounts of investments in such projects are also very little, further supporting the theory that venture capitalists are generally not keen to fund turnaround projects.
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OBJECTIVE NO 2
The problem faced by venture capitalist License Raj and The IPO Boom Till early 90s, under the license raj regime, only commodity centric Businessesthrived in a deficit situation. To fund a cement plant, venture capital is not needed.What was needed was ability to get a license and then get the project funded by the banks and DFIs. In most cases, the promoters were wellestablished industrial houses,with no apparent need for funds. Most of these entities were capable of raising fundsfrom conventional sources, including term loans from institutions and equity markets. Scalabilit
The Indian software segment has recorded an impressive growth over the last fewyears and earns large revenues from its export earnings, yet our share in the globalmarket is less than 1 per cent. Within the software industry, the value chain rangesfrom body shopping at the bottom to strategic consulting at the top. Higher valueaddition and profitability as well as significant market presence take place at thehigher end of the value chain. If the industry has to grow further and survive the fluxit would only be through innovation. For any venture idea to succeed there should bea product that has a growing market with a scalable business model. The IT industry(which is most suited for venture funding because of its "ideas" nature) in India tillrecently had a service centric business m odel. Products developed for Indian marketslack scale. Mindsets Venture capital as an activity was virtually nonexistent in India. Most venture capitalcompanies want to provide capital on a secured debt basis, to establish ed businesseswith profitable operating histories. Most of the venture capital units were offshoots of financial institutions and banks and the lending mindse
46
t continued. True venturecapital is capital that is used to help launch products and ideas of tomorrow. Abroad,this problem is solved by the presence of ` angel investors’. They are typically wealthyindividuals who not only provide venture finance but also help entrepreneurs to shapetheir business and make their venture successful. Returns, Taxes and Regulations There is a multiplicity of regulators like SEBI and RBI. Domestic venture fun ds areset up under the Indian Trusts Act of 1882 as per SEBI guidelines, w hile offshorefunds routed through Mauritius follow RBI guidelines. Abroad, s uch uc h funds are madeunder the Limited Partnership Act, which brings advant ages in terms of taxation. Thegovernment must allow pension funds and insu rance companies to invest in venturecapitals as in USA where corporate contri butions to venture funds are large. Exit The exit routes available to the venture capitalists were restricted to the IPO route.Before deregulation, pricing was dependent on the erstwhile CCI regulations. Ingeneral, all issues were under priced. Even now SEBI guideli nes make it difficult for pricing issues for an easy exit. Given the failure of the OTCEI and the revisedguidelines, small companies could not hope for a BSE/ NSE listing. Given the dullmarket for mergers and acquisitions, strategic sale was also not available. Valuation The recent phenomenon is valuation mismatches. Thanks to the software boom, most promoters have sky high valuation expectations. Given this, it is difficult for deals toreach financial closure as promoters do not agree to a valuation. This coupled withthe fancy for software stocks in the bourses means that most companies are preponingtheir IPO’s. Consequently, the number and quality of deals available to the venturefunds getsreduced
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OBJECIVE NO 3
To study the future prospect of venture capital financing With the advent of liberalization, India has been showing remarkable growth in theeconomy in the past 10 12 years. The government is promoting is promoting growth capacityutilization of available and acquired resources and hence entrepreneur development, by liberalizing norms regarding venture capital. While only eigh domestic venture capital funds were registered with SEBI during 19961998, 14 fundshave already been registered in 1999 -2000. Institutional interest is growing andforeign venture investments are also on the rise. Many state governments have alsoset up venture capital funds for the IT sector in partnership with the local statefinancial institutions and SIDBI. These include Andhra Paradesh, Karnataka, Delhi,Kerala and Tamil Nadu. The other states are to follow soon.In the year 2000, the finance ministry announced the liberalization of tax treatmentfor venture capital funds to promote them & to increase job creation. This is expectedto give a strong boost to the non resident Indians located in the Silicon Valley andelsewhere to invest some of their capital, knowledge and enterprise in these ventures. A Bangalore based media company, G r a y c e l l Ltd., has recently obtained VCinvestment totaling about $ 1.7 mn. The company would be creating and marketing branded web based consumer products in the near future. The following points can be considered as the harbingers of VC financing in India: India:a.Existence of a globally competitive high technology. b.Globally c.Second
competitive human resource capital.
Largest English speaking, scientific & technical manpower in theworld.
d.Vast
pool of existing and ongoing scientific and technical research carried byl arge number of research laboratories. e. Initiatives taken by the Government in formulating policies to encourageinve stors and entrepreneurs.
48
Findings
49
Findings During the preparation of my report I have analyzed many things which are following:-
•
A number of people in India feel that financial institution are not only conservatives but they also have a bias for foreign technology & they do not Trust on the abilities of entrepreneurs. •
Venture Capital Financing is still not regarded as commercial activity.
•
Restricted scope of Venture Capital in India to hi-tech project
•
•
Ambiguous Ambiguous government government policy policy towards towards inter-corpo inter-corporate rate investment investment and issue of shares to the entrepreneurs at below per value or in the form of a “ guest equity”. . Focus on specific industry
50
Limitations
51
Limitations of Study 1.
The biggest The biggest limitation was time
2.The
data required was secondary & that was not easily available.
3.
Study by Study by its nature is suggestive & not conclusive.
4.
Expenses were high in collecting & searching the data 5. Major Major limitati limitation on of the projec projectt has been been the unavailability of current data
52
Suggestions
53
Suggestions The investment should be made in the later stage •
•
•
•
The government allow or encourage pension fund and insurance company to make investment in the venture capital The entry of private sector should be encourage Tax concession and exemption given to the investor The government offer attractive opportunity to foreign investor to invest in Indian venture capital firms
54
Conclusion
55
Conclusion Venture capital can play a more innovation and development role in a developingcountry like India. It could help the rehabilitation of sick unit through people withideas and turnaround management skill. A l arge number of small enterprises in India because sick unit even be fore the commencement of production of production.Venture capita list could also be in line with the developments taking place in their parent compay .Yet another area where can play a significant role indeveloping co untries is theservice sector including tourism, publishing, healthcare etc. they could also providefinancial providefinancial assistance to people coming out of the universities, technical institutes etc.who wish to start their ow n venture with or without hightech content,but involvinghigh risk. This would encourage the entrepreneurial spirit. It is not only initialf unding which is need from the venture capitalists, but the should also simultaneously provide management and marketing expertisea real cri tical aspect of venturecapitalists, but they also simultaneously provi de management and marketingexpertisea real critical aspect of ventur e capital in developing countries. Which canimprove their effective ness by setting up venture capital cell in R&D and other scientific ge neration, providing syndicated or consortium financing and acing as business incubators
56
Bibliography 1.
JOURNALS •
APPLIED FINANCE VENTURE STAGE INVESTMENTPRE FERENCE IN INDIA, VINAY KUMAR, MAY, 2004. •
ICFAI JOURNAL OF APPLIED FINANCE MAY- JUNE •
VIKALPA VOLULMLE 28, APRI L- JUNE 2003 •
ICFAI JOURNAL OF APPLIED FINANCE, JULY- AUG. 2 . B O O K S •
I.M. Panday- venture capital development process in India •
I.
M. Panday- venture capital the Indian experience,
3.VARIOUS
NEWS P A P E R S 4 . I N T E R N E T
•
www.indiainfoline.com •
www.vcapital.com •
www.investopedia.com www.vcinstitute.com 57
APPENDIXList of Venture Capital Companies in India 20th Century Finance Corporation Limited 1.
Centre Point Dr.Ambedkar Road Parel Mumbai - 400012
2. AIG Investment Corporation (Asia) Limited India - Representative Office 2634 Oberoi Towers Nariman Point Mumbai - 400021
3. Acuity Strategic Financials Private Limited 14 Santosh, 2nd floor 242 Lady Jamshedji Road Mumbai - 400028
4. AIA Capital India Private Limited 9B Hansalaya Barakhamba Road New Delhi - 110001 Alliance DLJ Private Equity Fund 5. 404 / 405 Prestige Centre Point 7 Edward Road Bangalore - 560052
6. Alliance Venture Capital Advisors Limited
58
607 Raheja Chambers Free Press Journal Road, Nariman Point Mumbai - 400021
7. APIDC Venture Capital Limited 1102 Block A, 11th floor Babukhan Estate, Basheerbagh Hyderabad - 500001
8. Canbank Venture Capital Fund Limited 2/F Kareem Towers, 11th floor 19/5 -19/6 Cunningham Road Bangalore - 560052
9. Draper International (India) Private Limited V203 Prestige Meridian -1 M.G. Road Bangalore - 560001
10. eVentures India (Consultair Investments Private Limited) Khetan Bhavan 8 Jameshedji Tata Road Churchgate Mumbai - 400020 11. GE Capital Services India Limited AIFACS Building 1 Rafi Marg New Delhi - 110001 12. Gujarat Venture Finance Limited Premchand House Annexe, 1st floor Behind Popular House Ashram Road Ahmedabad - 380009 13. HSBC Private Equity Management Mauritius Limited Ashoka Estate, 3rd floor 24 Barakhamba Road New Delhi - 110001
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14. ICICI Securities and Finance Company Limited 41/44 Strand Palace M.Desai Marg Colaba Mumbai - 400005 15. ICICI Venture Funds Management Company Limited (formerly TDICI) Raheja Plaza, 4th floor 17 Commissariat Road D'Souza Circle Bangalore - 560025 16. IFB Venture Capital Finance Limited 8/1 Middletown Row Calcutta - 700071 17. Industrial Development Bank of India IDBI Tower Cuffe Parade Mumbai - 400005
18. Small Industries Development Bank of India (SIDBI) SIDBI Venture Capital Limited Nariman Bhavan 227 Vinay K. Shah Marg Nariman Point Mumbai - 400021
19. Tata Investment Corporation Limited Ewart House, 3rd floor Homi Modi Street Fort Mumbai - 400001 20. Templeton India Private Equity Fund 125 Free Press House Nariman Point Mumbai - 400021 21. Vista Ventures
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DBS Corporate Club 26 Cunningham Road Bangalore - 560052
22. Walden-Nikko India Management Company Limited One Silverstone 294 Linking Road Khar (West) Mumbai - 400052
61
