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§ Introduction
§ Stages
§ Process
§ Methods
§ References
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his is the first stage financing when the firm is
undertaking production and need additional funds for
selling its products. It involves seed/ initial finance for
supporting a concept or idea of an entrepreneur. he
capital is provided for R&D and initial marketing.
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his is the second stage financing for working
capital and expansion of a business. It involves
development financing so as to facilitate the public
issue.
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his later stage involves
§ dcquisition financing in order to acquire another firm
for further growth
§ Management buyout financing
§ urnaround financing
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§ ©ontinuous flow of deal is essential.
§ Deal may originate
¬referral system
¬active search
¬intermediaries
 


§ Initial screening of all the projects
§ Screening based on technology,product,market scope
size of investment.


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§ Most ventures are new and entrepreneurs may lack
operating experience.
§ Most venture capitalists ask for business plan.
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§ he terms and condition of venture finance are
finalised.
§ d formal agreement is entered between the venture
capitalist and the company
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§ Õentur e capitalist assumes the role of partner

§ May appoint an executive director to have closer look
into the project.
§ Õenture capitalist assists the project in developing
strategies,decision making and planning
  

§ Mxit means realisation of investment with maximum
profit
d venture may exit in one of following way
1. Going public
2. dcquisition by another company
3. Finding a new investor
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§ In India, the venture capital funds (Õ©Fs) can be categorised into:¬
§ hose promoted by the ©entral Government controlled development
finance institutions, for example:¬
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§ hose promoted by State Government controlled development finance
institutions, for example:¬
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§ hose promoted by public banks, for example:¬
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§ hose established as an overseas venture capital fund, for
example:¬
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§ Õenture capital assist small units to upgrade their
technologies
§ Service sector like tourism,health care
§ hey could provide financial assistance to people who
wish to start own venture
 



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[ Financial Management book by I.M.Pandy
[ www.wikipedia.com
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