Presented By:B.

Jayati Gupta Sameera Patnaik

Private equity is the provision of equity capital

by financial investors over the medium or

long term to non-quoted companies with high

growth potential

 Create

a business & develop your export performance

Improve

Recruit
Sell

highly qualified personnel

part or all of your company

Change

the size of your business and take

over one of your competitors

Launch

a new product your management capacity some of your assets

Improve

Liquidise

 Private Private

equity v/s self financing

equity v/s debt

Private

equity v/s raising capital via stock

market flotation

INSTITUTIONAL INVESTORS

FUND OF FUNDS

PRIVATE INDIVIDUALS

CORPORATES

OTHERS

PRIVATE EQUITY INVESTMENT FUND

PORTFOLIO/INVESTEE CO.1 PORTFOLIO/INVESTEE CO.2 PORTFOLIO/INVESTEE CO.3

PE MANAGEMENT COMPANY

 Independent Captive

Semi

- captive

 Business

Plan

The executive summary Company History Management Team Products and Services Analysis of your market and your competitors Operational Management

Financial projections Capital requirement Exit possibilities

Selecting The

a private equity firm

negotiation process

Company valuation

Offer letter
Final negotiation

Signing

the agreement

 Venture capital means funds made available

for startup firms and small businesses with exceptional growth potential. Venture capital is a subset of private equity All venture capital is private equity but all private equity is not a venture capital

Venture Capitalists generally: Finance new and rapidly growing companies Purchase equity securities Assist in the development of new products or services Add value to the company through active participation.

The SEBI has defined Venture Capital Fund in its

Regulation 1996 as a fund established in the

form of a company or trust which raises money through loans, donations, issue of securities or

units as the case may be and makes or proposes

to make investments in accordance with the regulations.

 Injects Shares

long term equity finance both the risk and reward practical advice and assistance

Provides

Network
Venture

of contacts
capitalists are experienced in the

process of IPO

SEED MONEY

START UP

FIRST ROUND

FOURTH ROUND

THIRD ROUND

SECOND ROUND

Financial Stage

Period (Funds locked in years)

Risk Perception

Activity to be financed For supporting a concept or idea or R&D for product development Initializing operations or developing prototypes

Seed Money

7-10

Extreme

Start Up

5-9

Very High

First Stage

3-7

High

Start commercials production and marketing

Financial Stage

Period (Funds locked in years) 3-5

Risk Perception

Activity to be financed

Second Stage

Sufficiently high

Expand market and growing working capital need

Market expansion, acquisition & product development for profit making company Facilitating public issue

Third Stage

1-3

Medium

Fourth Stage

1-3

Low

Deal origination

Screening
Due diligence (Evaluation) Deal structuring Post investment activity Exit plan

The financing pattern of the deal is the most

important element. Following are the various methods of venture financing:

Equity
Conditional loan Income note Participating debentures Quasi equity

 Initial public offer(IPOs)

Trade sale
Promoter buy back Acquisition by another company

 Company %

types

Acquired

Size Structure Stage

Risk

& return