What Is Venture Capital?

Venture capital is a widely used phrase that doesn't have an exact definition. It typically refers to
investment funds or partnerships — and, increasingly, venture capital divisions within large
corporations — that focus on investing in promising start-up and emerging companies. Venture
capitalists (VCs) have invested in some of today´s most famous corporate names, including
Apple, Genentech, Intel, and Compaq. Typically, the investment is in company stock; the
venture capitalist gets an ownership interest for the money invested.
Beyond supplying the company with money, the VC also provides assistance and expertise with
business planning — bringing industry knowledge, experience in growing businesses and
expertise in taking the company public some day. But you should be clear that venture capitalists'
primary motive is to make a lot of money on their intended investment. And that should be the
measure of any VC's past performance.
You should also be aware that most venture capitalists are interested only in businesses that can
grow to be large. So, if you're a small grocery store, a neighborhood sushi bar, or a corner
lemonade stand, don't waste your time seeking venture capital — unless you plan to create a
lemonade or raw-fish empire.

Venture Capital
'Venture Capital' is an important source of finance for those small and medium-sized firms,
which have very few avenues for raising funds. Although such a business firm may possess a
huge potential for earning large profits in the future and establish itself into a larger enterprise.
But the common investors are generally unwilling to invest their funds in them due to risk
involved in these type of investments. In order to provide financial support to such
entrepreneurial talent and business skills, the concept of venture capital emerged. In a way,
venture capital is a commitment of capital, or shareholdings, for the formation and setting up of
small scale enterprises at the early stages of their life cycle.
Venture capitalists comprise of professionals of various fields. They provide funds (known as
Venture Capital Fund) to these firms after carefully scrutinizing the projects. Their main aim is
to earn huge returns on their investments, but their concepts are totally different from the
traditional moneylenders. They know very well that if they may suffer losses in some project, the
others will compensate the same due to high returns. They take active participation in the
management of the company as well as provide the expertise and qualities of a good banker,
technologist, planner and managers. Thus, the venture capitalist and the entrepreneur literally act
as partners.

The venture capital recognises different stages of financing, namely:-

 Early stage financing - This is the first stage financing when the firm is undertaking
production and need additional funds for selling its products. It involves seed/ initial
finance for supporting a concept or idea of an entrepreneur. The capital is provided for
product development, R&D and initial marketing.
  Expansion financing - This is the second stage financing for working capital and
expansion of a business. It involves development financing so as to facilitate the public
issue.

 Acquisition/ buyout financing - This later stage involves:-

i. Acquisition financing in order to acquire another firm for further growth

ii. Management buyout financing so as to enable the operating groups/ investors for
acquiring an existing product line or business and

iii. Turnaround financing in order to revitalise and revive the sick enterprises.
In India, the venture capital funds (VCFs) can be categorised into the following groups:-
 Those promoted by the Central Government controlled development finance institutions,
for example:-

• ICICI Venture Funds Ltd.

• IFCI Venture Capital Funds Limited (IVCF)
• SIDBI Venture Capital Limited (SVCL)

 Those 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)

 Those promoted by public banks, for example:-

• Canbank Venture Capital Fund

• SBI Capital Markets Limited

 Those promoted by private sector companies, for example:-

• IL&FS Trust Company Limited

• Infinity Venture India Fund

 Those established as an overseas venture capital fund, for example:-

• Walden International Investment Group

• SEAF India Investment & Growth Fund
• BTS India Private Equity Fund Limited
All these venture capital funds are governed by the Securities and Exchange Board of India
(SEBI) . SEBI is the nodal agency for registration and regulation of both domestic and overseas
venture capital funds. Accordingly, it has made the following regulations, namely, Securities and
Exchange Board of India (Venture Capital Funds) Regulations 1996 and Securities and
Exchange Board of India (Foreign Venture Capital Investors) Regulations 2000. These
regulations provide broad guidelines and procedures for establishment of venture capital funds
both within India and outside it; their management structure and set up; as well as size and
investment criteria's of the funds.

Venture Capital in Indiana

There are nearly a dozen venture capital firms in Indiana. It is impressive that the newest fund,
the Heron Fund, came straight out of the pockets of individuals, not from pension funds or other
large investor.
Venture capital funding:

2i Capital (India) Private Limited

2i Capital is an asset management group that has insight into investment opportunities that arise
from India's vibrant and broad industrial and service sectors, and large, growing domestic market
on the one hand, while leveraging the country's recognized expertise in technology, engineering,
and technology services into global markets, on the other.
Actis
We have been investing in emerging markets for over 55 years through our origins as part of
CDC Capital Partners. We are most active in Africa, China, Malaysia and South Asia, and we
invest in SMEs and Power through our Aureos and Globeleq arms.
Artiman Ventures
Artiman Ventures is an early stage venture capital firm devoted to investing in world-class
entrepreneurs with leading edge technologies.
Avon Capital Services Ltd
Mumbai based Financial Services and Management Consultancy Company.
Baring Private Equity Partners (India) Limited
BPEP India commenced investment management activities in 1998 as part of the Baring Private
Equity Partners Group. We provide investment advisory services to Baring Funds, which have
cumulative assets under management in excess of $275 Million, in the manufacturing,
pharmaceutical, information technology and services sectors.
Berkeley Finance & Consulting
Berkeley Finance & Consulting (BFC) offers fund-raising, consulting and strategic alliance
formation services helping organizations planning to transform/expand operations by adding new
products
BlueRun Ventures
Being global lets BlueRun Ventures seek out best-of-breed technologies and entrepreneurs in the
markets where innovation is accelerating. BRV has been working with Nokia Venture Partners
on few investments.
CANBANK VENTURE CAPITAL FUND LIMITED
Canbank Venture is Canara Bank sponsored Venture fund. Incorporated in 1989, Canbank
Venture is an experienced fund management company currently managing Four funds.
ChrysCapital
ChrysCapital manages $1 billion across four funds and aspires to build the leading investment
firm focused on India. Our disciplined investment approach translates the growth in the Indian
economy into superior returns for our investors.
Global Technology Ventures Ltd
Global Technology Ventures Ltd (GTV), based in Bangalore, India, is a technology holding
company, tracing its lineage to the Sivan Securities Group. GTV partners with exceptional
entrepreneurs, who have a gut for the original, and are passionately dedicated to building
category-leading tech companies. Investing in technology ventures across all stages, GTV
provides access to capital and resources to companies with global market leadership potential.

Indian Private Equity and Venture

Capital Association (IVCA)
Indian Private Equity and Venture Capital Association (IVCA) is a member based
national organization that represents venture capital and private equity firms, promotes
the industry within India and throughout the world and encourages investment in high
growth companies.

IVCA members comprise venture capital firms, institutional investors, banks, incubators,
angel groups, corporate advisors, accountants, lawyers, government bodies, academic
institutions and other service providers to the venture capital and private equity industry.

Members represent most of the active venture capital and private equity firms in India.
These firms provide capital for seed ventures, early stage companies, later stage
expansion, and growth finance for management buyouts/buy-ins of established
companies.

http://www.hjventures.com/franchise/Franchise-Venture-Capital.html

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2i Capital (India) Pvt. Ltd.

http://www.2icapital.com

AMBIT PRAGMA VENTURES PVT. LTD.

http://www.ambitpragma.com

Ascent Venture

http://www.ascentvp.com/

Bharti Airtel Ltd

http://www.bharti.in

Canaan Advisors Pvt Ltd

http://www.canaan.com/home/india/

Canbank Venture Capital Fund Ltd

http://www.canbankventure.com

Caspian Advisors Private Limited

http://www.caspian.in

Centre for Management Buy-Out Research - The Centre for Private

Equity Research

http://www.nottingham.ac.uk/business/cmbor/

CHRYSCAPITAL

http://www.chryscapital.com/

Ernst & Young

http://www.ey.com

Gaja Adviors India Pvt Ltd

http://www.gajacapital.com

General Atlantic Private Limited

http://www.generalatlantic.com/en/home

Gujarat Venture Capital Fund Limited

http://www.gvfl.com

HSBC Private Equity Management (Mauritius) Ltd

http://www.hsbc.co.in

http://www.blackstone.com/

http://www.blackstone.com/

IDFC Private Equity Co. Ltd.

http://www.idfcpe.com/pages/main1.html

IFCI

http://www.ifciltd.com/

IFCI Venture Capital Funds Ltd.

http://www.ifciventure.com

IFMR Trusteeship Services Pvt Ltd

http://www.ifmrtrust.co.in

IL&FS

http://www.ilfsindia.com/

International Finance Corporation

http://www.ifc.org

KKR India Advisors Pvt. Ltd.

http://www.kkr.com

Kotak Investment Advisors Ltd.

http://www.kotak.com/

Madison India Capital

http://www.madison-india.com
New Silk Route Advisors Pvt. Ltd.

http://www.nsradvisors.com

NVPVC Management India Pvt Ltd - (Norwest Venture Partner

Venture Capital)

http://www.nvp.com

Omidyar Network

http://www.omidyar.com/

Providence Equity

http://www.provequity.com/

Providence Equity Advisors India Pvt Ltd

http://www.provequity.co.in

Radiant Capital (Paid Through - RAIM Advisors Pvt Ltd)

http://www.raimadvisors.com

Reliance Technology Venture Pvt Ltd

http://www.relianceada.com

Standard Chartered Private Equity Advisory India Pvt Ltd

http://www.sc.com

SUN Group
 http://www.scp.ru

Temasek Holdings Advisors IndIa Pvt Ltd

http://www.temasek.com.sg

Trident Capital

http://www.tridentcap.com

TVS Capital

http://www.tvscapital.in

VentureEast Fund Advisors

http://www.ventureast.net/

Walden India Advisors Pvt Ltd

http://www.waldenintl.com

Warburg Pincus India Private Ltd

http://www.warburgpincus.com

Marketplace
Investor Directory
Downloadable Venture Capital Database

Alerion Partners LLC -- Venture Capital Firm

Ballast Point Ventures -- Venture Capital Firm

BayTech Venture Capital -- Venture Capital Firm

BioAdvance -- Venture Capital Firm

Blue Horizon Equity -- Private Equity Investment Firm

Caldera Investment Group -- Venture Capital Firm

Capitol Partners -- Private Equity Investment Firm

Century Park Capital Partners -- Private Equity Investment Firm

Claritas Capital -- Private Equity Investment Firm

Cross Atlantic Partners, Inc. -- Private Equity Investment Firm

http://www.nvca.org/def.html

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