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VENTURE CAPITAL
CAPITAL
INTRODUCTION
Monitoring
Exit
PROCESS OF VENTURE CAPITAL
FINANCING CONT.
Deal Origin : It is essential for venture capital
firm to have continuous source of deals in order to
survive and grow in market.
Screening : VC firm carry out initial screening of
all the project on the basis of some broad criteria.
VCF usually prefer investing in technology related
industry which involves development at large
scale. E.g. Software industry, IT, pharmaceuticals,
bio technology, agriculture and allied industries.
They ensure success rate of project before
investing on the same.
PROCESS OF VENTURE
CAPITAL FINANCING CONT.
Evaluation : VCF go in for detailed evaluation of
entrepreneurs business for screening business plan,
evaluating management team of company, understanding
credibility of entrepreneur of business as they invest huge
amount of money and bare high risk.
Deal structuring : Once the proposal is found it to be
viable, then VC and entrepreneur enter into contract which
is known as deal structuring which includes
a) VC right to control business
b) board members
c) right to replace management in case of poor
performance
d) buyback agreement and acquisition
e) earn out agreements etc.
Repurchase
V.C. Investment
Involmentry Exit
repurchases by
Companies usually
management
fail and going to
liquidation
Trade Sale
Company sold to
commercial buyer
Venture
Capital Exit
Routes
NEDFI
Joint initiative of NEDFI &
M-Doner
Started operation from 2017
6 Venture till now
VENTURE CAPITAL FUND IN INDIA
VCFs in India can be categorized into five groups:
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.