ENTREPRENEURSHIP MANAGEMENT

VENTURE CAPITAL FINANCING RAHUL H. KADAM

ROLL CALL: 21

INTRODUCTION
Venture Capitalists are investment firms that makes venture investment, providing capital for start-up or expansion. They are looking for higher rate of return, bringing their managerial abilities to small businesses with great potential growth. Business Angels are private investor with huge personal capital, looking forward to invest their money in business which are not helped by financial institutions because are too risky.

Definitions
Venture Capital ... a long term risk capital to finance high technology projects which involve risk at the same time has strong potential for growth. Venture Capital Company.. a financial institution which joins an entrepreneur as a copromoter in a project and share the risk

FEATURES
Usually in the form of an equity participation and may also take the form of convertible debt or long term loan. Investment is made only in high risk but high growth potential projects. Venture capital is available only for commercialisation of new ideas or new technologies. Once the venture has reached full potential the venture capitalist disinvests its holding either in the market or to the promoter. It is not just injection of money but also an input needed to set up the firm, design its marketing strategy and organise and manage it.

SCOPE OF VENTURE CAPITAL

Development of an idea SEED FINANCE Implementation stage STARTUP FINANCE Fledging stage - ADDITIONAL FINANCE Establishment stage ESTABLISHMENT FINANCE

INDIAN SCENARIO
METHODS: Equity Participation Conventional loan Conditional loan Income notes

VENTURE CAPITAL FUNDS IN INDIA

1. Those promoted by the Central Government controlled development finance institutions. For example: - ICICI Venture Funds Ltd. - IFCI Venture Capital Funds Ltd (IVCF) - SIDBI Venture Capital Ltd (SVCL) 2. Those promoted by State Government controlled development finance institutions. For example: - Punjab Infotech Venture Fund - Gujarat Venture Finance Ltd (GVFL) - Kerala Venture Capital Fund Pvt Ltd.

3. Those promoted by public banks. For example: - Canbank Venture Capital Fund - SBI Capital Market Ltd
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VENTURE CAPITAL FUNDS IN INDIA

4. Those promoted by private sector companies. For example: - IL&FS Trust Company Ltd - Infinity Venture India Fund 5. Those established as an overseas venture capital fund. For example: - Walden International Investment Group - HSBC Private Equity management Mauritius Ltd

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