1. VENTURE
CAPITAL

2. VENTURE CAPITAL
 The provision of funding for a start-up. For example, suppose a company with little access to
capital is attempting to open a new market or access an old one with a better product. It
may not be able to receive loans, either because of an unproven track record or because it
is already significantly in debt, and it may have exhausted financing from family and friends.
Venture capital allows this company to begin and build upon its operations by providing
necessary funding. Usually, the provider of venture capital takes equity in the company in
exchange for the money. Venture capital firms may also provide needed expertise in how to
run a business than can help the start-up become successful.

3. VENTURE CAPITAL INVESTMENT
PROCESS
 The venture capital activity is a sequential process involving the following
six steps.
1. Deal origination
2. Screening
3. Due diligence Evaluation)
4. Deal structuring
5. Post-investment activity
6. Exit

4. Stages of
Financing
Seed
Money
To prove a
concept
(15-25L)
Extreme
risk
Start Up
Provided to
companies
(25-60L)
Very high
risk
First
Round
Manufacturing
funds
(1-3cr)
High risk
Second
Round
Working
capital &
expenses
(2-5cr)
Sufficiently
high
Third
Round
For newel
profitable
company
(2-10cr)
Medium
Forth
Round
Bridge
Financing for
going public
process
(100cr)
Low

5. 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
VENTURE CAPITAL IN INDIA

6. 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

7. PIRAMAL GROUP
 The family office of Ajay Piramal is stepping into venture capital investing
to get a slice of the fast-growing entrepreneurial ecosystem in the country.
Known as being one of the savviest value investors in India Inc, Piramal is
backing the newly floated Montane Ventures, an early-stage fund, as its
anchor investor, a first such move by an Indian business conglomerate.
 Piramal's family office, sources said, is ploughing as much as $50 million
into Montane Ventures, which plans to raise up to $150 million with
participation from external investors, going forward. The Piramal group,
however, did not disclose how much the family office has invested in the
fund.
 Celebrated as an ace dealmaker, having reaped windfall gains by selling
stake in telecoms major Vodafone, Piramal, whose diversified group has
interests across pharmaceutical, finance and private equity, would stand
out as one of the first Indian business leaders to propel a pure-play
venture capital fund.

8. TOP CITIES ATTRACTING VENTURE CAPITAL
INVESTMENTS
CITIES SECTORS
MUMBAI Software services, BPO, Media, Computer
graphics, Animations, Finance & Banking
BANGALORE All IP led companies, IT & ITES, Bio-
technology
DELHI Software services, ITES , Telecom
CHENNAI IT , Telecom
HYDERABAD IT & ITES, Pharmaceuticals
PUNE Bio-technology, IT , BPO

10. PRIVATE EQUITY VENTURE CAPITAL
% ACQUISITION PE firms almost always buy
100% of a company in an LBO
VCs only acquire a minority
stake – less than 50%
STRUCTURE PE firms use a combination
of equity and debt
VC firms use only equity
INVESTMENT PE firms buy mature, public
companies
VCs invest mostly in early-
stage – sometimes pre-
revenue – companies
RISK AND RETURN But it would never work in PE,
where the number of
investments is smaller and the
investment size is much larger
– if even 1 company “failed,”
the fund would fail. So that’s
why they invest in mature
companies where the chance
of failing in 3-5 years is close
to 0%.
VCs expect that many of the
companies they invest in will
fail, but that at least 1
investment will generate huge
returns and make the entire
fund profitable. Venture
capitalists invest small
amounts of money in dozens
of companies, so this model
works for them.

11. SEBI REGULATIONS
 A venture capital fund may be set up by a company or a trust, after a certificate of
registration is granted by SEBI on an application made to it. On receipt of the certificate of
registration, it shall be binding on the venture capital fund to abide by the provisions of the
SEBI Act, 1992.
 A VCF may raise money from any investor, Indian, Non-resident Indian or foreign, provided
the money accepted from any investor is not less than Rs 5 lakhs. The VCF shall not issue
any document or advertisement inviting offers from the public for subscription of its security
or units.
 SEBI regulations permit investment by venture capital funds in equity or equity related
instruments of unlisted companies and also in financially weak and sick industries whose shares
are listed or unlisted.
 At least 80% of the funds should be invested in venture capital companies and no other limits
are prescribed.
 SEBI Regulations do not provide for any sectoral restrictions for investment except investment
in companies engaged in financial services.

12. MICRO VENTURE CAPITAL (MICRO VC)
• Micro venture capital is money invested to seed early-stage emerging companies with
amounts of finance that is typically less than that of traditional venture capital. In contrast
to traditional venture capital which is money used to invest in companies looking to fund
growth (also referred to as a Series A round of funding), micro venture capital consists of
smaller seed investments, typically between 50 lacs to 1.5Cr., in companies that have yet
to gain traction. In India the number of micro venture capital firms have continued to rise
rapidly over the last 5/6 years, and have become an important source of finance for start-
up companies.
• Characteristics Of Micro VC’s
A. Initial investment at the seed stage
B. Investment on behalf of 3rd party Limited Partners
C. Most commonly have fund sizes that are less than around 100 Cr.
• Most micro venture capital firms pursue start-ups that are at their seed stage because of
their lower initial cost basis. Though there is a high probability that the majority of these
start-ups will not survive long enough to reach a Series-A round of funding, micro venture
capital firms are willing to make the investment because start-ups generally do not require
large sums of capital to bring a product to market, and because they believe that it
requires only a few successful companies for them to see profitable returns.

13. • Micro venture capital is money invested to seed early-stage emerging companies with
amounts of finance that is typically less than that of traditional venture capital. In contrast to
traditional venture capital which is money used to invest in companies looking to fund growth
(also referred to as a Series A round of funding), micro venture capital consists of smaller seed
investments, typically between 50 lacs to 1.5Cr., in companies that have yet to gain traction. In
India the number of micro venture capital firms have continued to rise rapidly over the last 5/6
years, and have become an important source of finance for start-up companies.
• Characteristics Of Micro VC’s
A. Initial investment at the seed stage
B. Investment on behalf of 3rd party Limited Partners
C. Most commonly have fund sizes that are less than around 100 Cr.
• Most micro venture capital firms pursue start-ups that are at their seed stage because of their
lower initial cost basis. Though there is a high probability that the majority of these start-ups
will not survive long enough to reach a Series-A round of funding, micro venture capital firms
are willing to make the investment because start-ups generally do not require large sums of
capital to bring a product to market, and because they believe that it requires only a few
successful companies for them to see profitable returns.

14. • The big players have also started to form Micro VC’s with an idea of scooping up a huge &
successful start-up.
• Professional from VC funds have started quitting their jobs & are showing inclination towards
micro VC’s
• Challenges
1. Such investor will face fewer Series-A deals as the same will go to bigger VC’s & the
important deals will never come to Micro VC’s.
2. Most of Micro VC’s are equipped with professionals & who neither have entrepreneurial
background nor thorough understanding of how VC works.

15. THANKYOU
MANALI DALVI 13
ABHISHEK DARIRA 14
NANCY FERNANDES 15
HARESH GALA 16
SUNIL GODBOLE 17