“GOVERNMENT POLICY FOR NEW

VENTURE DEVELOPMENT IN INDIA”

A Project submitted in partial fulfillment of the
requirement fot the degree of

B.Com ( Hons) 2017-2020

By

ROUNAK KUMAR TIWARY

College Roll No : BCFIN17154
Registration No : KU1717596
University Roll No : 181605443226

Under the Supervision of

Dr. Aftab Alam Ansari

Faculty Of Commerce

Karim City College, Jamshedpur-831001

2020

Page No: 1
 CERTIFICATE

KARIM CITY COLLEGE

Faculty of Commerce, Jamshedpur

CERTIFICATE OF APPROVAL
\

This Project entitled “GOVERNMENT POLICY FOR NEW

VENTURE DEVELOPMENT IN INDIA” is hereby approved as
acreditable commerce study carried out and presented in a satisfactory
manner to narrate its acceptance as prerequisite to the Degree for
Bachelor of Commerce ( B.Com. Hons.) which is being submitted.

Project Supervisor External Examiner

Page No: 2
 ACKNOWLEDGEMENT

Working on this project entitled “GOVERNMENT POLICY FOR NEW VENTURE

DEVELOPMENT IN INDIA” was a source of immense knowledge to me. I would like to express
my sincere gratitude to my project supervisor Dr. Aftab Alam Ansari for his guidance and
valuable support, inspiring discussions and constant supervision throughout the course of this
work.

I am also thankful to my honorable Principal DR. Mohammad Reyaz for his inspiration. I am also
thankful to our H.O.D Dr. Aftab Alam Ansari for his help during my project work.

I acknowledge with a deep sense of gratitude, the encouragement and interpretations received
from our faculty members and colleagues. I would also like to thank my parents for their love and
support.

Name : Rounak Kumar Tiwary

College Roll No : BCFIN17154
Registration No : KU1717596
University Roll No : 181605443226

Page No: 3
 Table of contents
Sr. No. Particular Page No.

. Venture Capital In India 96-142

 Evolution Of Venture Capital Industry In India 97
 Objective And Vision For Venture Capital In India 100
 Venture Capital Industry Life Cycle In India 101
 Growth Of Venture Capital In India 105
 2009 Venture Capital Investment In India 108
 Need For Growth Of Venture Capital In India 109
 Regulatory And Legal Framework 111
 Major Regulatory Framework For Venture Capital 112
Industry
 Regulation Of The Business Of Venture Capital In India 117
 Key Success Factor For Venture Capital Industry In 120
India
 Industrial Attractiveness 123
 Domestic Economic Factors 124
 Guidelines For Overseas Venture Capital Investment In 130
India
 Challenges Ahead For Venture Capital Financing In 132
India
 Problems Of Venture Capital Financing In India 133
 Opportunities And Threats 134
Recommendations 142
. Conclusion 150

Bibliography & Webliography 152

Page No: 4
 VENTURE
CAPITAL IN
INDIA

Page No: 5
 INTRODUCTION
 DEVELOPMENT OF NEW VENTURE CAPITAL
INDUSTRY IN INDIA

The first major analysis on risk capital for India was reported in 1983. It
indicated that new companies often confront serious barriers to entry into capital
market for raising equity finance which undermines their future prospects of
expansion and diversification. It also indicated that on the whole there is a need
to review the equity cult among the masses by ensuring competitive return on
equity investment. This brought out the institutional inadequacies with respect to
the evolution of venture capital.

In India, the Industrial Finance Corporation of India (IFCO) initiated the idea of
Venture Capital when it established the Risk Capital Foundation in 1975 to
provide seed capital to small and risky projects. However the concept of venture
capital financing got statutory recognition for the first time in the fiscal budget
for the year 1986-87.

The venture Capital companies operating at present can be divided into four
groups:

 Promoted by All-India Development Financial Institutions

 Promoted by State Level Financial Institutions
 Promoted by Commercial Banks
 Private Venture Capitalists.

 Promoted by all India Development Financial Institutions

Page No: 6
The IDBI started a Venture Capital in 1976 as per the long term fiscal policy of
government of India, with an initial of Rs. 10 Cr. which raised by imposing a
chess of 5% on all payment made for the import of technology know-how
projects requiring funds from Rs.5 Lacks to Rs.2.5Cr. Were considered for
financing. Promoter’s contribution ranged from this fund was available at a
concessional interest rate of 9% (during gestation period) which could be
increased at later stages.

The ICICI provided the required impetus to Venture Capital activities in India,
1986 it started providing venture Capital finance in 1998 it promoted, along with
the Unit trust of India (UTI) Technology Development and information Company
of India (TDICI) as first venture Capital company registered under the companies
act, 1956. The TDICI may provide financial assistance to venture capital
undertaking which are set up by technocrat entrepreneurs, or technology
information and guidance services.

The risk capital foundation established by the industrial finance corporation of

India (IFCI) in 1975, was converted in 1988 into the Risk Capital and
Technology Finance Company (RCTC) as a subsidiary company of the IFCI the
rate provides assistance in the form of conventional loans, interest free
conditional loans on profit and risk sharing basis or equity participation in
extends financial support to high technology projects for technological up
gradations. The RCTC has been renamed as IFCI Venture Capital Funds Ltd.
(IVCF)

 Promoted by State Level Financial Institutions

In India, the State Level Financial Institutions in some states such as Madhya
Pradesh, Gujarat, Uttar prades, etc., have done an excellent job and have
provided venture capital to a small scale enterprise. Several successful

Page No: 7
entrepreneurs have been the beneficiaries of the liberal funding environment. In
1990, the Gujarat Industrial Investment Corporation, promoted the Gujarat
Venture Financial Ltd (GVFL) along with other promoters such as the IDBI, the
World Bank, etc., the GVFL provides financial assistance to business in the form
of equity, conditional loans or income notes for technologies development and
innovative products. It also provides finance assistance to entrepreneurs.

The government of Andhra Pradesh has also promoted the Andhra Pradesh
Industrial Development Corporation (APIDC) venture capital ltd. to provide
venture capital financing in Andhra Pradesh.

 Promoted by Commercial Banks

Canbank Venture Capital Fund, State bank Venture Capital Fund and Grindlays
bank Venture Capital Fund have been set up the respective commercial banks to
undertake venture capital activities.

The State bank Venture Capital funds provides financial assistance for bought out
deal as well as new companies in the form of equity which it disinvests after the
commercialization of the project.

Canbank Venture Capital Funds provides financial assistance for proven but yet
to be commercially exploited technologies. It provides assistance both in the
form of equity and conditional loans.

 Private venture Capital Funds

Several private sector venture capital funds have been established in India such
as the 20th Centure Venture Capital Company, Indus venture capital Funds,
Infrastructure Leasing and financial Services Ltd.

Some of the companies that have received funding through this route include:

Page No: 8
 o Mastek, one of the oldest software house in India
o Ruskan software, Pune based software consultancy
o SQL Star, Hyderabad based training and software development
consultancy
o Satyam Infoway, the first private ISP in India
o Hinditrom, makers of embedded software
o Selectia, provider of interaction software selectior
o Yantra, ITL Infosy’s US subsidiary, solution for supply chain management
o Rediff on the Net, India website featuring electronic shopping, news, chat
etc.

 OBJECTIVE AND VISION FOR VENTURE

CAPITAL IN INDIA

Venture capitalists finance innovation and ideas which have potential for high
growth but with inherent uncertainties. This makes it a high-risk, high return
investment. Apart from finance, venture capitalists provide networking,
management and marketing support as well. In the broadest sense, therefore,
venture capital connotes financial as well as human capital. In the global venture
capital industry, investors and investee firms work together closely in an enabling
environment that allows entrepreneurs to focus on value creating ideas and
allows venture capitalists to drive the industry through ownership of the levers of
control, in return for the provision of capital, skills, information and
complementary resources. This very blend of risk financing and hand holding of
entrepreneurs by venture capitalists creates an environment particularly suitable
for knowledge and technology based enterprises.

Page No: 9
Scientific, technology and knowledge based ideas properly supported by venture
capital can be propelled into a powerful engine of economic growth and wealth
creation in a sustainable manner. In various developed and developing economies
venture capital has played a significant developmental role. India, along with
Israel, Taiwan and the United States, is recognized for its globally competitive
high technology and human capital. India has the second largest English speaking
scientific and technical manpower in the world.

The Indian software sector crossed the Rs 100 billion mark turnover during 1998.
The sector grew 58% on a year to year basis and exports accounted for Rs 65.3
billion while the domestic market accounted for Rs 35.1 billion. Exports grew by
67% in rupee terms and 55% in US dollar terms. The strength of software
professionals grew by 14% in 1997 and has crossed 1, 60000. The global
software sector is expected to grow at 12% to 15% per annum for the next 5 to 7
years.
Recently, there has also been greater visibility of Indian companies in the US.

Given such vast potential not only in IT and software but also in the field of
service industries, biotechnology, telecommunications, media and entertainment,
medical and health services and other technology based manufacturing and
product development, venture capital industry can play a catalytic role to put
India on the world map as a success story.

 VENTURE CAPITAL INDUSTRY LIFE CYCLE IN

INDIA

From the industry life cycle we can know in which stage venture capital are
standing. On the basis of this management can make future strategies of their
business.

Page No: 10
 Industry Life Cycle

Introduction Growth

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

The growth of venture capital in India has four separate phases:

 Phase I- formation of TDICI in 80’s and regional funds as GVFL &

APIDC in early 90s.

The first origin of modern venture capital in India can be traced to the setting up
of a technology Development Funds in the year 1987-88, though the levy of
access on all technology import payment. Technology development fund was
stated to provide financial support to innovative and high risk technological
programmers through the Industrial development bank of India.

The first phase was the initial phase in which the concept of venture capital got
wider acceptance. The first period did not really experience any substantial
growth of venture capitals. The 1980’s were marked by an increasing
disillusionment with the trajectory of the economic system and a belief that
liberalization was needed. The liberalization process started in 1985 in a limited
way. The concept of venture capital received official recognition in 1988 with the
announcement of the venture capital guidelines.

During 1988 to 1992 about 9 venture capital institutions came up in India.

Though the venture capital funds should operate as open entities, Government of

Page No: 11
India controlled them rigidly. One of the major forces that induced Government
of India to start venture funding was the World Bank. The initial funding has
been provided by World Bank. The most important feature of the 1988 rules was
that venture capital funds received the benefit of a relatively low capital gains tax
rate which was lower than the corporate rate. The 1988 guidelines stipulated
venture capital funding firms should meet the following criteria:

o Technology involved should be new, relatively untried, very closely held,

in the process of being taken from pilot to commercial stage or
incorporate some significant improvement over the existing ones in India.
o Promoters/entrepreneurs using the technology should be relatively new,
professionally or technically qualified, with inadequate resources to
finance the project.

Between 1988 and 1994 about 11venture capital funds became operational either
through reorganizing the business or through new entities.

All these followed the Government of India guidelines for venture capital
activities and have primarily supported technology oriented innovative business
started by first generation entrepreneurs. Most of these were operated more like a
financing operation. The main feature of this phase was that the concept got
accepted. Venture capitals become operational in India before the liberalization
process started. The context was not fully ripe for growth of venture capitals. Till
1995 the venture capital operated like any bank but provided funds without
collateral. The first stage of the venture capital industry in India was plagued by
in experienced management, mandates to invest in certain states and sectors and
general regulatory problems. Many public issue by small and medium companies
have shown that the Indian investor is becoming increasingly wary of investing
in the projects of new and unknown promoters.

Page No: 12
The liberation of the economy and toning up of the capital market changed the
economic landscape. The decisions relating to issue of stocks and shares was
handled by an office namely: Controller of capital issues (CCI). According to
1988 venture capital guideline, any organization requiring starting venture funds
have to forward an application to CCI. Subsequent to the liberalization of the
economy in 1991, the office of CCI was abolished in May 1992 and the powers
were vested in Securities and Exchange Board of India (SEBI). The Securities
and Exchange Board of India Act, 1992 empower SEBI under section 11(2)
thereof to register and regulate the working of venture capital funds. This was
done in 1996, through a government notification. The power to control venture
funds has been given to SEBI only in 1995 and the notification came out in 1996.
Till this time venture funds were dominated by Indian firms. The new regulations
became the harbinger of the second phase of the venture capital growth.

 Phase II- Entry of Foreign Venture Capital Funds (VCF) between 1995-
1999

The second phase of venture capital growth attracted many foreign institutional
investors. During this period overseas and private domestic venture capitalists
began investing in VCF. The new regulations in 1996 helped in this. Though the
changes proposed in 1996 had a salutary effect, the development of venture
capital continued to be inhibited because of the regulatory regime and restricted
the FDI environment. To facilitate the growth of venture funds, SEBI appointed a
committee to recommend the changes needed in the venture capital funding
context. This coincided with the IT boom as well as the success of Silicon Valley
startups. In other words, venture capital growth and IT growth co-evolved in
India.

 Phase III-(2000 onwards)- Venture capital becomes risk averse and

activity declines:

Page No: 13
Not surprisingly, the investing in India came “crashing down” when NASDAQ
lost 60% of its value during the second quarter of 2000 and public markets
(including those in India) also declined substantially. Consequently, during 2001-
2003, the venture capitals started investing less money and in money and in more
mature companies in an effort to minimize the risks. This decline broadly
continued until 2003.

 Phase IV- (2004 onward)- Global venture capitals firms actively investing
in India

Since India’s economy has been growing at 7%-8% a year, and since some
sectors, including the services sector and the high end manufacturing sector, have
been growing at 12%-14% a year investors renewed their interest and started
investing again in 2004 the number of deals and the total dollars invested in India
has been increasing substantially.

 GROWTH OF VENTURE CAPITAL IN INDIA

Growth of Venture Capital in India

The venture capital is growing 43% CAGR. However, in spite of the venture
capital scenario improving, several specific Venture Capital funds are setting up
Page No: 14
shop in India, with the year 2007 having been a landmark year for venture capital
in India. The no of deals are increasing year by year. The no of deal in 2003 only
56 and now in 2007 it touch the 387 deals. The introduction stage of venture
capital industry in India is completed in 2003 after that growing stage of India
venture capital industry is starrted.

Tere are 160 venture capital firms/funds in India. In 2006 it is only but in 2007
the number of venture capital firms are 146. The reason is good position of
capital market. But in 2008 no of venture capital firms increase by only 14 the
reason is crashdown of capital market by 51%. The no of venture capital funds
are increasing year by year

2000 2001 2002 2003 2004 2005 2006 2007 2008

81 77 78 81 86 89 105 146 160

NO. OF VC FIRMS IN INDIA

180
160
160 146
140
NO. OF VC FIRMS

120
105
100 86 89
81 77 78 81
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008

YEARS

Venture capital growth and industrial clustering have a strong positive

correlation. Foreign diect investment, starting of R&D centres, availability of
venture capital and growth of entreneurial firms are getting concentrated into five
clusters. The cost of mnitoring and the cost of skill acquisition are lower in

Page No: 15
clusters, especially for innovation. Entry costs are also lower in clusters. Cerating
enetrepreneursship and stimulating innovation in clusters have to become a major
concern of public policy makers. This is essential becouse only when the cultural
context is conductive for risk management venture capital will take-of. Clusters
support innovation and facilitates risk bearing. Venture capital prefer clusters
because the information costs are lower. Policies for promoting dispersion of
industries are becoming redundant after the economic liberalization.

The venture capital firm invest their money in most developning sectors like
health care, IT-ITes, Telecom, Bio-technology, Media & Entretainment, shipping
& ligistics etc.

Total investment
685
1284 988
1101

3979

1628

1839 478
1638 615

IT & ITES BFSI Healtcare & Lifesciences Media & Entertinment

Telecom Manufacturing Eng & constrution Energy
Shipping & Logistics Others

Total sector wise venture capital investment

Page No: 16
Now venture capital is nascent stage in India. Now due to growth of sector, the
venture capital industry is also growing. The top most players in the industries
are ICICI venture capital fund, IT&FS venture capital fund, Canbank.

 2009 VENTURE CAPITAL INVESTMENT IN INDIA

Venture Capital firms invested $475 million in 92 deals during 2009, down from
the $836 million invested across 153 deals in the previous year, according to a
study by Venture Intelligence and Global-India Venture Capital Association.

Venture capital firms, however, began to increase the pace of their investments in
Indian companies in the October-December quarter, making 42 investments
worth $265 million, compared to 23 investments worth $102 million in the
comparative period a year earlier, the study said.

"The strong recovery in investment activity in the last quarter of 2009, as well the
rising interest among global investors towards emerging markets like India, is
quite encouraging for the growth of the sector," Sudhir Sethi, director of the
Global-India Venture Capital Association, said in a statement.

"During 2010, we expect significant follow-on investments into companies that

raised Series a round (first round) in the past two to three years as well as a rise
in exit activity as the global economic recovery gathers pace," he added.

The information technology and IT-enabled services industry retained its status
as the favorite among venture capital investors during 2009, but the industry's
share declined to about 43% of total investments from about 55% in 2008. Other
industries that attracted significant investor attention during the period included
financial services, healthcare and life sciences, and alternative energy. Within IT
and IT-enabled services, online services companies retained their status as the
favorite sector, accounting for about 39% of the investments during 2009.

Page No: 17
 Investment in Area
10%
15%

50%

25%

South India (47% in the total value) Western India (29% in the total value)
North India (12% in the total value) East India (12% in the total value)

Companies based in south India accounted for 50% of all venture capital
investments (47% by value) during 2009. Their peers in western India accounted
for 25% of the pie (29% by value) while companies in north India accounted for
15% of the investments (12% by value).

Among cities, companies headquartered in Bangalore and Mumbai were the

favorites among venture capital investors during 2009, with the former attracting
29 investments and the latter 15. The Delhi National Capital Region accounted
for 11 investments, followed by Hyderabad with 9 investments.

 NEED FOR GROWTH OF VENTURE CAPITAL IN

INDIA

People in developing countries are poor in part because they have far less capital
than people in industrial countries. Because of this shortage, workers have little
in the way of specialized machinery and equipment, and firms lack money to
obtain more equipment. As a result, productivity of workers in developing
countries is low compared with that of workers in industrial countries. Financial-

Page No: 18
resource flows from industrial to developing countries are an obvious means to
overcome this inequality. But financial resources are not enough. Some
developing countries have natural resources such as oil or minerals that, when
sold on world markets, have provided large amounts of money. In many cases the
money has failed to stimulate sustained economic growth or increased
productivity and income for the average person. In part, failure to use capital
productively results from the way these resources flow. In some countries the
government gets the money, which it uses to perpetuate itself through military
spending or through increased consumption spending. In other cases, resources
flow to wealthy individuals who use them to maintain high levels of conspicuous
consumption.

India is still developing country. In India, a revolution is ushering in a new

economy, wherein entrepreneurs mind set is taking a shift from risk adverse
business to investment in new ideas which involve high risk. The conventional
industrial finance in India is not of much help to these new emerging enterprises.
Therefore there is a need of financing mechanism that will fit with the
requirement of entrepreneurs and thus it needs venture capital industry to grow in
India.

Few reasons for which active Venture Capital Industry is important for India
include:

 Innovation: Needs risk capital in a largely regulated, conservation, legacy

financial system

 Job Creation: large pool of skilled graduates in the first and second tier cities

 Patient capital: Not flighty, unlike FIIs

Page No: 19
 Creating new Industry Clusters: Media, Retail, Call Centers and back office
processing, trickling down to organized effort of support services like Office
services, Catering, Transportation.

 REGULATORY AND LEGAL FRAMEWORK

At present, the Venture Capital activity in India comes under the purview of
different sets of regulations namely:

 The SEBI (Venture Capital Funds) Regulation, 1996[Regulations] lays

down the overall regulatory framework for registration and operations
of venture capital funds in India.
 The Indian Trust Act, 1882 or the company Act, 1956 depending on
whether the fund is set up as a trust or a company.
 The foreign investment Promotion Board (FIPB) and the RBI in case of
an offshore fund. These funds have to secure the permission of the
FIPB while setting up in India and need a clearance from the RBI for
any repatriation of income.
 The Central Board of Direct Taxation (CBDT) governs the issues
pertaining to income tax on the proceed from VC funding activity. The
long term capital gain tax is at around 10% in India and the relevant
clauses to VC may be found in Section 10(sub section 23)
 Overseas venture capital investments are subject to the Government of
India Guidelines for Overseas Venture Capital Investment in India
dated September 20, 1995.
 For tax exemptions purposes venture capital funds also needs to comply
with the Income Tax Rules made under Section 10(23FA) of the
Income Tax Act.

Page No: 20
  REGULATION OF THE BUSINESS OF VENTURE
CAPITAL FUND IN INDIA
 Eligibility conditions for grant of license to a venture capital fund.-

(1) A venture capital fund shall not be granted license unless it fulfills the
following conditions, namely:-  

a) It is incorporated as a company under the Companies Ordinance, 1984

(XLVII of 1984);
b) It is not engaged in any business other than that of investment in venture
projects;
c) It has a minimum paid-up capital of fifty million rupees raised through
private placement; and
d) For the purpose of managing its entire business, it has entered into a
contract, in writing, with a venture capital company and a copy of which
has been filed with the Commission.

(2)    The board of venture capital fund shall not have a director, who is on the
board of any venture project being financed by the fund.

 Condition for grant of license.-

(1)  No venture capital fund shall commence business unless a license is granted
under these rules.

(2)    For obtaining a license a venture capital fund shall

Page No: 21
 a. Make an application to the Commission on Form V providing
information as sought in Annex therein, along with all the relevant
documents;
b. Submit a bank draft payable to the Commission evidencing the
payment of non-refundable application processing fee amounting to
fifty thousand rupees; and
c. Submit an undertaking that no change in the memorandum and
articles of association and in the directors shall be made without
prior written authorization of the Commission and that all conditions
for grant of license shall be complied with.

(3) On being satisfied that a venture capital fund is eligible for the grant of a
license and that it would be in the public interest so to do, the Commission may
grant a license in form VI.

(4) Without prejudice to any other conditions under these rules, the Commission
may while granting license imposes any conditions, as it may deem necessary.

 Terms and conditions of operation. -  Unless granted a general or

specific waiver by the Commission, a venture capital fund shall
a. Not expose more than forty per cent of its equity to any single group
of companies; Explanation. - For the purposes of this rule group of
companies shall mean companies managed by the members of one
family including spouse, dependent lineal ascendants and
descendants and dependent brothers and sisters.
b. Disclose in its accounts all investments in companies and group of
companies exceeding ten per cent of paid-up capital of venture
capital fund;
c. ensure that the maximum exposure of the venture capital fund to its
directors, affiliated companies and companies in which any of the

Page No: 22
 directors and their family members including spouse, dependent
lineal ascendants and descendants and dependent brothers and sisters
hold controlling interest shall not exceed ten per cent of the overall
portfolio of venture capital; and
d. Not accept any investment from any investor, which is less than one
million rupees.
 Renewal of license. –

(1) The license granted to the fund under rule 10 shall be valid for one year and
shall be renewable annually on payment of a fee of twenty thousand rupees on an
application being made on Form VII.

(2)   The Commission may, after making such inquiry and after obtaining such
further information as it may consider necessary, renew the license of such fund,
one year on Form VIII on such conditions as it may deem necessary.

 Private placement.-

A venture capital fund shall raise and receive monies for investment in venture
projects through private placement of such securities as may be notified by the
Commission, from time to time.

 Placement memorandum.-

A venture capital fund shall, before soliciting placement of its securities, file with
the Commission a placement memorandum which shall inter alia give details of
the terms subject to which monies are proposed to be raised from such
placements.

Page No: 23
  KEY SUCCESS FACTOR FOR VENTURE
CAPITAL INDUSTRY IN INDIA

Knowledge becomes the key factor for a competitive advantage for company.
Venture Capital firms need more expert knowledge in various fields. The various
key success factors for venture capital industry are as follow:

 Knowledge about Govt. changing policies:

Investment, management and exit should provide flexibility to suit the business
requirements and should also be driven by global trends. Venture capital
investments have typically come from high net worth individuals who have risk
taking capacity. Since high risk is involved in venture financing, venture
investors globally seek investment and exit on very flexible terms which provides
them with certain levels of protection. Such exit should be possible through IPOs
and mergers/acquisitions on a global basis and not just within India. In this
context the judgment of the judiciary raising doubts on treatment of tax on capital
gains made by firms registered in Mauritius gains significance - changing
policies with a retrospective effect is undoubtedly acting as a dampener to fresh
fund raising by Venture capital firms.

 Quick Response time :

The companies have flat organization structure results in quicker decision

making. The entrepreneur is relieved of the trauma that one normally goes
through in an interface with a funding institution or a development agency. They
follow a clearly defined decision making process that works with clock like
precision, which means that if they agree on a funding schedule entrepreneur can
count on them to stick it.

Page No: 24
  Knowledge about Global Environment

With increasing global integration and mobility of capital it is important that

Indian venture capital firms as well as venture financed enterprises be able to
have opportunities for investment abroad. This would not only enhance their
ability to generate better returns but also add to their experience and expertise to
function successfully in a global environment.

 Good Human Resource :

Venture capital should become an institutionalized industry financed and

managed by successful entrepreneurs, professional and sophisticated investors.
Globally, venture capitalist are not merely finance providers but are also closely
involved with the investee enterprises and provide expertise by way of
management and marketing support. This industry has developed its own ethos
and culture. Venture capital has only one common aspect that cuts across
geography i.e. it is risk capital invested by experts in the field. It is important that
venture capital in India be allowed to develop via professional and institutional
management.

 Balance between three factors

Venture Capital backed companies can provide high returns. However, despite of
success stories like Apple, FedEx of Microsoft, a lot of these deals fail. It is said
that only one out of ten companies succeed. That's why every deal has an element
of potential profit and an element of risk, depending on the deals size. To be
successful, a Venture Capital Company must manage the balance between these
three factors.

Page No: 25
 Financial markets and
the industries to invest in

Knowledge

Risk management skills Possible investees and

and contacts to investors external expertise

Frame work for key success factor

Knowledge is key, to get the balance in this "Magic Triangle". With knowledge
we mean knowledge about the financial markets and the industries to invest in,
risk management skills and contacts to investors, possible investees and external
expertise. High profits, achievable by larger deals, are not only important for the
financial performance of the Venture Capital Company. As a good track record
they are also a vital argument to attract funds which are the basis for larger deals.
However, larger deals imply higher risks of losses. Many Venture Capital
companies try to share and limit their risks. Solutions could be alliances and
careful portfolio management. There are Venture Capital firms that refuse to
invest in e-start-up because they perceive it as too risky to follow today's type.

Page No: 26
  INDUSTRIAL ATTRACTIVENESS
 Market growth rate

CAGR OF VC
VALUE OF DEALS

16000 14234
14000
12000
10000
8000 43%
6000
4000
2000 1160
0
2000 2007

CAGR of venture capital industry

From the above graph we can say that Venture capital industry is growing at the
CAGR of 43%. And the value of deals in 2000 was 1160 which increased to
14234 in the year of 2007. This shows substantial increase in the number of
deals. This attracts the new entrepreneur to enter in the industry.

 Intensity of competition:

NO. OF VC FIRMS IN INDIA

180
160
160 146
140
NO. OF VC FIRMS

120 105
100 86 89
81 77 78 81
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008

YEARS

Number of venture capital firms in India

Page No: 27
Here the number of venture capital firms is increasing year by year. In 2001 it is
only 77 now it has been increased to 160 in the year of 2008. The reason behind
that is there is over all growth in the GDP and also substantial growth position in
sectors like biotechnology, IT-ES, retailing, telecom etc. due to this more players
are eager to establish their foothold in the industry.

 Regulatory policy

Minimum contribution and fund size: the minimum investment in a Venture

Capital Fund from any investor will not be less than Rs. 5 lacs and the minimum
corpus of the fund before the fund can start activities shall be at least Rs. 5
crores. And the foreign players can easily enter in the venture capital industry of
India. An offshore venture capital company may contribute 100% of the capital
of domestic venture capital fund. There are other hurdles to enter in the industry
so there is favorable condition for them to enter in to venture capital industry in
India.

 DOMESTIC ECONOMIC FACTORS:

 GDP growth rate

G D P G R O W T H R A T E (% )

V C G R O W T H R A T E (% )

GDP V/S VC GROWTH RATE

12 300
251.06 9.4 9.6
10 8.5 240.91 250
7.5
8 200

6 150

4 89.79 100
2 33.33 50

0 0
2004 2005 2006 2007

GDP GROWTH RATE VC GROWTH RATE

GDP V/S VC Growth rate

Page No: 28
In above chart there was a positive relationship there was between GDP growth
rates. But in 2007 the growth of Venture Capital was decline to 89.79% from
240.91% in 2006 but here the value of deal was increasing. In 2008 the growth
rate is 9% and project the next year GDP 8% to 9%. So here we can conclude
that there is good growth prospect for the venture capital players to enter in the
horizon of India.

INFLATION v/s VC GROWTH RATE

VC GROW TH RATE
8 7.4 300
IN F L A T IO N R A T E

7
251.06 250
5.8
6 240.91
200
5 4.5

4 150
3.2
3
100
89.79
2
50
1 33.33
0 0
2004 2005 2006 2007

INFLATION RATE VC GROWTH RATE

Inflation V/S Venture capital growth rate

In above chart the inflation rate is decreased to 4.5 in 2005 from 7.4 in 2004. At
same time the growth of Venture Capital is also declining to 33.33% in 2005
from 251.06% in 2004. From the above chart we can conclude that inflation and
Venture Capital has positive relationship. Now in June 2008 the inflation rate
was 11.9 and the NO. Of deal in first two quarter in 2008 was 170 and value of
deal was 6390 US$mn and in third quarter of 2008 there was only four deals.
And in October the inflation touch the 13.01%. Due to increase in inflation rate
the people will go to spend more. Thus, their savings will decrease. So more
money will come into the market and demand of the products will increase
continuously. Now due to growth of any sector will attract new entrepreneur to

Page No: 29
enter in the industry. For that they must need funds. So there is a great
opportunity for venture capital industry to attract this new entrepreneur.

SMALL SCALE INDUSTRIES

SMALL SCALE ENTERPRIZE

130 128.44

125 123.42
No. of units ( lakhs)

118.59
120
113.95
115
109.49
110
105
100
2002-2003 2003-2004 2004-2005 2005-2006 2006-2007

Growth of small and medium scale industries

Venture Capital, to be able to contribute to developing entrepreneurship in India,

needs to concentrate its investment in small and medium enterprises. A “Package
for Promotion of Micro and Small Enterprises” was announced in February 2007.
This includes measures addressing concerns of credit, fiscal support, cluster-
based development, infrastructure, technology, and marketing. Capacity building
of MSME Associations and support to women entrepreneurs are the other
important features of this package. SMEs have been allowed to manage their
direct/indirect exposure to foreign exchange risk by booking/canceling/rollover
of forward contracts without prior permission of RBI.

To boost the micro and small enterprise sector, the bank has decided to refinance
an amount of 7000 crore to the Small Industries Development Bank of India,
which will be available up to March 31, 2010. The Central Bank said that it is

Page No: 30
also working on a similar refinance facility for the National Housing Bank
(NHB) of an amount of Rs 4, 000 crore.

 EXPORT AND IMPORT

VALUE OF EXPORT AND IMPORT

200 185.7 185.7

U S d o lla rs in b illio n s

180
149.2 155.5
160
140 126.4
120 111.5
103.1
100 83.6
78.1
80 61.4 63.8
52.7
60
40
20
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

EXPORT IMPORT

Value of export import

The value of Import and export are increasing year by year. In 2002-03 the value
of import and export are 52.7 and 61.4 US $bn respectively and in 2007-08 the
value of import and export are 155.7 and 185.7 US $bn. It means industry needs
more money for import and export. So it is an opportunity for venture capital. On
the other side when company going to export the company must have good
contact with other country’s company. So for that venture capital industry is
useful because they have good contact and affiliation network with other
country’s company.

Industry Profitability:

Page No: 31
The venture capital firms invest their money in most emerging sectors like
biotechnology, IT-ES, retailing, infrastructure which gives higher return but also
they all involved risk in substantial amount.

Possible result of venture capital investments

No. of companies out of 10 Annual rate of

investments return
Failure 4 0%
Viable 3 15%
Solid 2 50%
Superstars 1 100%
Blended average 24.5

Success ratio of venture capital deals

From the above table we can see the success ratio of the venture capital
investment. 40% of the investments are getting failure and only 10% of them are
able to give 100% return. And the average return by the venture capitalists is only
24.5% which is not extra ordinary. This type of returns can be found in many
other investment options. So there isn’t any special reason to invest in venture
capital.

 Product innovation:

Venture capital firms are coming with new ideas of investment to attract the
buyers to their firms. For this purpose they are introducing new types of funds
and schemes.

For example, IFCI Venture Capital Funds Limited (IVCF) has launched three

new funds in emerging sectors of the economy namely:

i) India Automotive Component Manufacturers Private Equity Fund –1-Domestic

(IACM-1-D) with a target corpus of Euro 60 million equivalent to Rs.396 crores.

Page No: 32
This Fund will be dedicated for investment mainly in Indian Automotive
Component companies and in other related/ emerging sectors.

ii) India Enterprise Development Fund (IEDF), a Venture Capital fund set up
with target corpus of Rs.250 crores to invest in knowledge based projects in key
sectors of Indian economy with outstanding growth prospects.

iii) Green India Venture Fund (GIVF), a Venture Capital fund setup with a target
corpus of Euro 50 million (approx. Rs.330 crores) with the objective to invest in
commercially viable Clean Development Mechanism (CDM), energy efficient
and other commercially viable projects with an aim to reduce negative ecological
impact, efficient usage of resources such as energy, power etc and other related
sectors/projects. The summary of the Funds:

Launching of new funds by IFCI

Funds IACM –1 GIVF IEDF

Objective To invest in Indian The objective of To invest in
companies engaged GIVF would be to knowledge based
in, amongst others, invest in companies projects with
the automotive parts setting up Clean relatively high entry
and components Development barriers, critical
manufacturing sector Mechanism (CDM) applications,
in order to generate projects and other prospects for high
high returns for its commercially viable growth and global
investors. projects/ business. scalability in
diversified and/ or
emerging sectors.
Size Euro 60 million (INR Euro 50 million INR 250 Cr
396 Cr) (INR 330 Cr) with
green shoe option

Page No: 33
Nature of Fund PE Fund VC Fund VC Fund
Tenure 8 yrs. With two 10 years with two 10 years with two
prolongation option of prolongation options prolongation options
1 year each of 1 year each of 1 year each.
Expected returns 20% p.a. 20% p.a. 20% p.a.
Size of Rs. 6 to 40 Cr Rs. 2 to 30 Cr Rs. 2 to 25 Cr
investment
Management fee 2% of the total 2% of the total 2% of the total
subscription amount subscription amount subscription amount
Launching of new funds by IFCI

The SICOM venture capital firm introduce SME opportunity fund for small scale
industries.

 CHALLENGES AHEAD FOR VENTURE CAPITAL

FINANCING IN INDIA

Venture Capital is money provided by professionals who invest and manage

young rapidly growing companies that have the potential to develop into
significant economic contributors. According to SEBI regulations, venture capital
fund means a fund established in the form of a company or trust, which raises
money through loans, donations, issue of securities or units and makes or
proposes, to make investments in accordance with these regulations. The funds so
collected are available for investment in potentially highly profitable enterprises
at a high risk of loss. A Venture Capitalist is an individual or a company who
provides. Investment Capital, Management Expertise, Networking & marketing
support while funding and running highly innovative & prospective areas of
products as well as services.
Thus, the investment made by Venture Capitalists generally involves –
o Financing new and rapidly growing companies.

Page No: 34
 o Purchasing equity securities.
o Taking higher risk in expectation of higher rewards.
o Having a long frame of time period, generally of more than 5 - 6 years.
o Actively working with the company's management to devise strategies
pertaining to the overall functioning of the project.
o Networking and marketing of the product /service being offered.

In an attempt to bring together highly influential Indians living across the United
States, a networking society named IND US Entrepreneurs or TiE was set up in
1992. The aim was to get the Indian community together and to foster
entrepreneurs for wealth creation. A core group of 10 - 15 individuals worked
hard to establish the organization. The group (TiE) has now over 600 members
with 20 offices spread across the United States. Some of the famous personalities
belonging to this group are Vinod Dham (father of the Pentium Chip), Prabhu
Goel, and K.B. Chandrashekhar (Head of $ 200 mn. Exodus Communications, a
fibre optic network carrying 30% of all Internet content traffic hosting websites
like Yahoo, Hotmail and Amazon.)

 PROBLEMS OF VENTURE CAPITAL FINANCING

IN INDIA:

VCF is in its nascent stages in India. The emerging scenario of global

competitiveness has put an immense pressure on the industrial sector to improve
the quality level with minimization of cost of products by making use of latest
technological skills. The implication is to obtain adequate financing along with
the necessary hi-tech equipments to produce an innovative product which can
succeed and grow in the present market condition. Unfortunately, our country
lacks on both fronts. The necessary capital can be obtained from the venture
capital firms who expect an above average rate of return on the investment. The

Page No: 35
financing firms expect a sound, experienced, mature and capable management
team of the company being financed. Since the innovative project involves a
higher risk, there is an expectation of higher returns from the project. The
payback period is also generally high (5 - 7 years). The various problems/ queries
can be outlined as follows:

o Requirement of an experienced management team.

o Requirement of an above average rate of return on investment.
o Longer payback period.
o Uncertainty regarding the success of the product in the market.
o Questions regarding the infrastructure details of production like plant
location, accessibility, relationship with the suppliers and creditors,
transportation facilities, labor availability etc.
o The category of potential customers and hence the packaging and pricing
details of the product.
o The size of the market.
o Major competitors and their market share.
o Skills and Training required and the cost of training.
o Financial considerations like return on capital employed (ROCE), cost of
the project, the Internal Rate of Return (IRR) of the project, total amount
of funds required, ratio of owners investment (personnel funds of the
entrepreneur), borrowed capital, mortgage loans etc. in the capital
employed.

Page No: 36
 RECOMMENDATIONS:
 Multiplicity of regulations – need for harmonization
and nodal Regulator:

Presently there are three set of Regulations dealing with venture capital activity
i.e. SEBI (Venture Capital Regulations) 1996, Guidelines for Overseas Venture
Capital Investments issued by Department of Economic Affairs in the MOF in
the year 1995 and CBDT Guidelines for Venture Capital Companies in 1995
which was modified in 1999. The need is to consolidate and substitute all these
with one single regulation of SEBI to provide for uniformity, hassle free single
window clearance. There is already a pattern available in this regard; the mutual
funds have only one set of regulations and once a mutual fund is registered with
SEBI, the tax exemption by CBDT and inflow of funds from abroad is available
automatically. Similarly, in the case of FIIs, tax benefits and foreign
inflows/outflows are automatically available once these entities are registered
with SEBI. Therefore, SEBI should be the nodal regulator for VCFs to provide
uniform, hassle free, single window regulatory framework. On the pattern of FIIs,
Foreign Venture Capital Investors (FVCIs) also need to be registered with SEBI.

 Tax passes through for Venture Capital Funds:

VCFs are a dedicated pool of capital and therefore operate in fiscal neutrality and
are treated as pass through vehicles. In any case, the investors of VCFs are
subjected to tax. Similarly, the investee companies pay taxes on their earnings.
There is a well established successful precedent in the case of Mutual Funds
which once registered with SEBI are automatically entitled to tax exemption at
pool level. It is an established principle that taxation should be only at one level

Page No: 37
and therefore taxation at the level of VCFs as well as investors amount to double
taxation. Since like mutual funds VCF is also a pool of capital of investors, it
needs to be treated as a tax pass through. Once registered with SEBI, it should be
entitled to automatic tax pass through at the pool level while maintaining taxation
at the investor level without any other requirement under Income Tax Act.

 Mobilization of Global and Domestic resources:

 Foreign Venture Capital Investors (FVCIs):

Presently, FIIs registered with SEBI can freely invest and disinvest without
taking FIPB/RBI approvals. This has brought positive investments of more than
US $10 billion. At present, foreign venture capital investors can make direct
investment in venture capital undertakings or through a domestic venture capital
fund by taking FIPB / RBI approvals. This investment being long term and in
the nature of risk finance for start-up enterprises, needs to be encouraged.
Therefore, at least on par with FIIs, FVCIs should be registered with SEBI and
having once registered, they should have the same facility of hassle free
investments and disinvestments without any requirement for approval from
FIPB / RBI. This is in line with the present policy of automatic approvals
followed by the Government. Further, generally foreign investors invest through
the Mauritius-route and do not pay tax in India under a tax treaty. FVCIs
therefore should be provided tax exemption. This provision will put all FVCIs,
whether investing through the Mauritius route or not, on the same footing. This
will help the development of a vibrant India-based venture capital industry with
the advantage of best international practices, thus enabling a jump-starting of the
process of innovation. The hassle free entry of such FVCIs on the pattern of FIIs
is even more necessary because of the following factors:

Page No: 38
 o Venture capital is a high risk area. In out of 10 projects, 8 either fail or
yield negligible returns. It is therefore in the interest of the country that
FVCIs bear such a risk.
o For venture capital activity, high capitalization of venture capital
companies is essential to withstand the losses in 80% of the projects. In
India, we do not have such strong companies.
o The FVCIs are also more experienced in providing the needed managerial
expertise and other supports.

 Augmenting the Domestic Pool of Resources:

The present pool of funds available for venture capital is very limited and is
predominantly contributed by foreign funds to the extent of 80 percent. The pool
of domestic venture capital needs to be augmented by increasing the list of
sophisticated institutional investors permitted to invest in venture capital funds.
This should include banks, mutual funds and insurance companies’ up to
prudential limits. Later, as expertise grows and the venture capital industry
matures, other institutional investors, such as pension funds, should also be
permitted. The venture capital funding is high-risk investment and should be
restricted to sophisticated investors. However, investing in venture capital funds
can be a valuable return-enhancing tool for such investors while the increase in
risk at the portfolio level would be minimal. Internationally, over 50% of
venture capital comes from pension funds, banks, mutual funds, insurance funds
and charitable institutions.

Page No: 39
  Flexibility in Investment and Exit:

 Allowing multiple flexible structures:

Eligibility for registration as venture capital funds should be neutral to firm

structure. The government should consider creating new structures, such as
limited partnerships, limited liability partnerships and limited liability
corporations. At present, venture capital funds can be structured as trusts or
companies in order to be eligible for registration with SEBI. Internationally,
limited partnerships, Limited Liability Partnership and limited liability
corporations have provided the necessary flexibility in risk-sharing,
compensation arrangements amongst investors and tax pass through. Therefore,
these structures are commonly used and widely accepted globally specially in
USA. Hence, it is necessary to provide for alternative eligible structures.

 Flexibility in the matter of investment ceiling and sectoral restrictions:

70% of a venture capital fund’s investible funds must be invested in unlisted

equity or equity-linked instruments, while the rest may be invested in other
instruments. Though sectoral restrictions for investment by VCFs are not
consistent with the very concept of venture funding, certain restrictions could be
put by specifying a negative list which could include areas such as finance
companies, real estate, gold-finance, activities not legally permitted and any other
sectors which could be notified by SEBI in consultation with the Government.
Investments by VCFs in associated companies should also not be permitted.
Further, not more than 25% of a fund’s corpus may be invested in a single firm.
The investment ceiling has been recommended in order to increase focus on
equity or equity-linked instruments of unlisted startup companies. As the
venture capital industry matures, investors in venture capital funds will set their
own prudential restrictions.

Page No: 40
  Changes in buy back requirements for unlisted securities:

A venture capital fund incorporated as a company/ venture capital undertaking

should be allowed to buy back up to 100% of its paid up capital out of the sale
proceeds of investments and assets and not necessarily out of its free reserves and
share premium account or proceeds of fresh issue. Such purchases will be exempt
from the SEBI takeover code. A venture-financed undertaking will be allowed
to make an issue of capital within 6 months of buying back its own shares instead
of 24 months as at present. Further, negotiated deals may be permitted in unlisted
securities where one of the parties to the transaction is VCF.

 Relaxation in IPO norms:

The IPO norms of 3 year track record or the project being funded by the banks or
financial institutions should be relaxed to include the companies funded by the
registered VCFs also. The issuer company may float IPO without having three
years track record if the project cost to the extent of 10% is funded by the
registered VCF. Venture capital holding however shall be subject to lock in
period of one year. Further, when shares are acquired by VCF in a preferential
allotment after listing or as part of firm allotment in an IPO, the same shall be
subject to lock in for a period of one year. Those companies which are funded by
Venture capitalists and their securities are listed on the stock exchanges outside
the country; these companies should be permitted to list their shares on the Indian
stock exchanges.

Relaxation in Takeover Code:

The venture capital fund while exercising its call or put option as per the terms of
agreement should be exempt from applicability of takeover code and 1969
circular under section 16 of SC(R) A issued by the Government of India.

Page No: 41
Issue of Shares with Differential Right with regard to voting and dividend:

In order to facilitate investment by VCF in new enterprises, the Companies Act

may be amended so as to permit issue of shares by unlisted public companies
with a differential right in regard to voting and dividend. Such flexibility already
exists under the Indian Companies Act in the case of private companies which
are not subsidiaries of public limited companies.

QIB Market for unlisted securities:

A market for trading in unlisted securities by QIBs is developed.

NOC Requirement:

In the case of transfer of securities by FVCI to any other person, the RBI
requirement of obtaining NOC from joint venture partner or other shareholders
should be dispensed with.

RBI Pricing Norms:

At present, investment/disinvestment by FVCI is subject to approval of pricing

by RBI which curtails operational flexibility and needs to be dispensed with.

 Global integration and opportunities:

 Incentives for Employees:

The limits for overseas investment by Indian Resident Employees under the
Employee Stock Option Scheme in a foreign company should be raised from
present ceilings of US$10,000 over 5 years, and US$50,000 over 5 years for
employees of software companies in their ADRs/GDRs, to a common ceiling of
US$100,000 over 5 years. Foreign employees of an Indian company may invest
in the Indian company to a ceiling of US$100,000 over 5 years.

Page No: 42
  Incentives for Shareholders:

The shareholders of an Indian company that has venture capital funding and is
desirous of swapping its shares with that of a foreign company should be
permitted to do so. Similarly, if an Indian company having venture funding and
is desirous of issuing an ADR/GDR, venture capital shareholders (holding
saleable stock) of the domestic company and desirous of disinvesting their shares
through the ADR/GDR should be permitted to do so. Internationally, 70% of
successful startups are acquired through a stock-swap transaction rather than
being purchased for cash or going public through an IPO. Such flexibility
should be available for Indian startups as well. Similarly, shareholders can take
advantage of the higher valuations in overseas markets while divesting their
holdings.

 Global investment opportunity for Domestic Venture Capital Funds

(DVCF):

DVCFs should be permitted to invest higher of 25% of the fund’s corpus or US

$10 million or to the extent of foreign contribution in the fund’s corpus in
unlisted equity or equity-linked investments of a foreign company. Such
investments will fall within the overall ceiling of 70% of the fund’s corpus. This
will allow DVCFs to invest in synergistic startups offshore and also provide them
with global management exposure.

 Infrastructure and R&D :

Infrastructure development needs to be prioritized using government support and

private management of capital through programmers similar to the Small
Business Investment Companies in the United States, promoting incubators and
increasing university and research laboratory linkages with venture-financed

Page No: 43
startup firms. This would spur technological innovation and faster conversion of
research into commercial products.

 Self Regulatory Organization (SRO):

A strong SRO should be encouraged for evolution of standard practices, code of

conduct, creating awareness by dissemination of information about the industry.
Implementation of these recommendations would lead to creation of an enabling
regulatory and institutional environment to facilitate faster growth of venture
capital industry in the country. Apart from increasing the domestic pool of
venture capital, around US$ 10 billion are expected to be brought in by offshore
investors over 3/5 years on conservative estimates. This would in turn lead to
increase in the value of products and services adding up to US$100 billion to
GDP by 2005. Venture supported enterprises would convert into quality IPOs
providing over all benefit and protection to the investors. Additionally, judging
from the global experience, this will result into substantial and sustainable
employment generation of around 3 million jobs in skilled sector alone over next
five years. Spin off effect of such activity would create other support services and
further employment. This can put India on a path of rapid economic growth and
a position of strength in global economy.

Page No: 44
 CONCLUSION

Page No: 45
The study provides that the maturity if the still nascent Indian Venture Capital
market is imminent.

Venture Capitalists in Indian have notice of newer avenues and regions to

expand. VCs have moved beyond IT service but are cautious in exploring the
right business model, for finding opportunities that generate better returns for
their investors.

In terms of impediments to expansion, few concerning factors to VCs include;

unfavorable political and regulatory environment compared to other countries,
difficulty in achieving successful exists and administrative delays in
documentation and approval.

In spite of few non attracting factors, Indian opportunities are no doubt promising
which is evident by the large number of new entrants in past years as well in
coming days. Nonetheless the market is challenging for successful investment.

Therefore Venture capitalists responses are upbeat about the attractiveness of the
India as a place to do the business.

Page No: 46
 BIBLIOGRAPHY

Page No: 47
  BOOKS:

 Taneja Satish, “Venture Capital in India”.

 Chary T Satyanarayana, “Venture Capital – Concepts & Applications ”

 MAGAZINE:

 Sharma Kapil, an Analysis of Venture Capital Industry in India.

 REPORT:

 Trends of Venture Capital in India, survey Report by Deloitte, 2009.

 Global Trends of Venture Capital, survey report by Deloitte, 2009.
 Economic survey 2008-09,

 WEBSITE:

 www.ivca.org
 www.indiavca.org.
 www.vcindia.com
 www.ventureintelligence.in
 www.nvca.org
 www.economictimes.indiatimes.com
 www.100ventures.com
 www.google.com
 www.deloitte.com

Page No: 48