Академический Документы
Профессиональный Документы
Культура Документы
Operations of VC
5 VCs Involvement
1
2
3
Early Stage
(Angel)
1 Seed
2 Start Up
Expansion
(VC)
1 Second
Stage
2 Third
Stage
PE
3 Acquisitions
Description
Small amount to prove concept &
financial feasibility.
Product Development & Initial Set
up. No commercial sales yet.
Working capital for Initial Growth.
Break-even not yet.
Rapid Sales Growth. Positive Profit
Bridge financing. Go Public.
Assuming control of another company
Communications
Software
Retail & Media
Computer HW
Biotechnilogy
Chemical
02 %
2 Early Stage
23 %
3 Expansion
57 %
4 Later Stage
18 %
Stage of Business
Investments
4 Considerations
1
2
3
4
Who to approach?
1 If your needs are small, raise money from your
own resources - Family, Fools & Friends
3 As
business
Capitalist
develops
contact
Venture
stage
Philosophy of VCs
1 VCs objective is long term capital appreciation VS
the companys objective is survival and growth
Investment decisions by
VC
1 Investment decision is both an Art & Science
1
Accessibility
Relevance
Trust
Downside Risk
5 Assessment of Risk
6 Steps to mitigate the Risk
Investment Process
1 Preliminary Screening
1
2
Executive Summery
Detailed Business Plan
Compatibility
Amount of Money Involved
Control
ROI
Exit Option
Investment Process
3
Due Diligence
1 Survey & Meetings with all Related Parties
2 Financial Statements
Final Approval
3 MOU with all Terms & Conditions
4 Engage a competent Lawyer
Self Evaluation
1 Do you understand the Market, Competition?
2 How many similar companies operate in the
space?
Approaching a VC
1 Understand the area of his focus
2 Approach in a professional business manner.
Send a well conceived Business Plan
ready with
Presentation
well
thought
out
Oral
Factors in Valuation
1 Nature and History of the business
2 Outlook of the Economy and the Industry
3 Net Value (Book Value) of the Stock
4 Weighted Average of Earnings of the company less
Costs
Breaking News
Assume that you have been very lucky and get
considerably big fortune from an unknown
relative. You have decided to become a business
Angel straight out of college, after getting your
MBA.
What will be your Investment objectives?
products
and
2 Plug HR
1
2
Background
8 Years, 10,000 Business Plans, 50 Companies
India is Unique
Big international companies will always win
No Advertising
300 Million internet users & 4 Billion internationally
VC Point of View- II
Ajit Khurana President SINE at IIT Bombay
Idea is not important
E.g. Makemytrip.com
Business Model
Investors VS Customers
Business Plan
Make important assumptions upfront e.g. More
goods will be sold online
Housing.com
Founders: Co founder - Adytya Sharma
Funding : Nexus, Softbank
Competition: 99 Acres, Magic Bricks, Makan.com
Map Based
100 data points
Lifestyle, Communities, Satisfaction Index, Price
rise index, Senior Citizen friendliness
Sold 50 Crores worth of Tata Housing in 15 days
Vision : Buy houses online
Future Plans
Reach : 45 Cites to 300 Cities
List every home in India
Get into related areas: Interior, Legal, Movers
Expend into other Geos Africa & US