TODAYS TOPIC

• WHAT IS VENTURE CAPITAL?

• WHO ARE VENTURE CAPITALIST?
• WHY VENTURE CAPITAL?
• 6‘ BIGGEST MISTAKES IN RAISING START UP
CAPITAL? HOW CAN U QUALIFY FOR V.C.
• HOW TO APPROACH FOR VCF’s
• VENTURE CAPITAL IN INDIAN CONTEXT
• ISSUES AND CHALLENGES
• FUTURE OF V.C IN INDIA.
• CONCLUSION
• QUICK RECAP
 .

• WHAT IS VENTURE CAPITAL?

• Venture capital is also called as “RISK
CAPITAL”.
• It is provided as “seed funding” to early stage,
High Potential Companies.
WHO ARE VENTURE CAPITALIST
Venture capital
comes from
Institutional
investor and High
net worth
individuals or
families and is
pooled by
dedicated firms

A venture capitalist is a person or institutional firm that

makes venture investment and these venture capitalist
are expected to bring managerial and technical expertise
as well as capital to their investment
Who can avail venture Capital?

Generally Venture capitalist firm invest

in high technology industries such as
biotechnology and IT (Information
Technology).

•QUALIFICATIONS:
•Should be a Technology Company.
•Can you be a market leader.
•Will it be cheap to make this company.
•Clear distribution channel.
•Can the company go public or Acquired.
 WHY VENTURE CAPITAL?

Firms opt for venture capital even

though the cost of acquiring is
higher because it will be difficult for
new and budding firms to acquire
loans from banks or raise capital
from public
 How to Approach vcf’s

Business Cycle: Do they invest in budding or

established businesses?
Industry: What is their industry focus?
Investment: Is their typical investment sufficient for
your needs?
Location: Are they regional, national or international?
Return: What is their expected return on investment?
Involvement: What is their involvement level?
 6 ‘ biggest mistakes in raising start up Capital?

1.Half-baked business plans.

2. Focusing too much on the idea

and too little on the management

3. Not asking for enough money

4. Having too many lenders or investors

5. Failing to get the proper legal

agreements

6. Poor cash flow management

 VENTURE CAPITAL IN INDIA

With the advent of liberalization, India has

been showing remarkable growth in the
economy in the past 10 - 12 years.

The venture capital industry in India has

grown dramatically in the last few years,
even boasting its own ‘Silicon Valley' in the
form of Bangalore.
 REASONS FOR GROWTH OF VENTURE CAPITAL
INVESTMENT IN INDIA
(i) Existence of a globally competitive high technology.

(ii) Globally competitive human resource capital.

(iii) Second Largest English speaking, scientific & technical manpower in the
world.

(iv) Vast pool of existing and ongoing scientific and technical research carried by
large number of research laboratories.

(v) Initiatives taken by the Government in formulating policies to encourage

investors and entrepreneurs.

(vi) Initiatives of the SEBI to develop a strong and vibrant capital market giving the
adequate liquidity and flexibility for investors for entry and exit.
Where are VC’s Investing In India?
• IT and IT-enabled services
• Software Products (Mainly Enterprise-focused)
• Wireless/Telecom/Semiconductor
• Banking
• PSU Disinvestments
•Media/Entertainment
• Bio Technology/Bio Informatics
• Pharmaceuticals
• Electronic Manufacturing
• Retail
 Conclusion
• The world is becoming increasingly
competitive
• Companies are required to be super
efficient with respect to cost, productivity,
labor efficiency, technical back up,
flexibility to consumer demand,
adaptability and foresightedness.
• There is an impending demand for highly
cost effective, quality products
 Conclusion
• There are large sectors of the economy that are
ripe for VC investors ,like,. I.T., Pharmacy,
Manufacturing. Telecom, Retail franchises, food
processing and many more.
• inspite of the existing shortcomings in the Indian
infrastructure.
• Looking ahead for a bright future
for India Inc.
 Quick recap
• WHAT IS VENTURE CAPITAL?
• WHO ARE VENTURE CAPITALIST?
• WHY VENTURE CAPITAL?
• 6 ‘ BIGGEST MISTAKES IN RAISING START UP
CAPITAL?
• HOW CAN U QUALIFY FOR V.C.
• HOW TO APPROACH FOR VCF’s
• VENTURE CAPITAL IN INDIAN CONTEXT
• ISSUES AND CHALLENGES
• FUTURE OF V.C IN INDIA.
• CONCLUSION
• FLASH BACK