Presentation on Venture Capital In India. Various stages of VC Funding. Advantages & Disadvantages. Top Venture Capital Funds in India
By Sumit Goyal (MBA, NIT Kurukshetra)
2. CONTENTS
ďź Meaning
ďź Features Of Venture Capital
ďź Stages Of Venture Capital Funding
ďź Methods Of VC Funding
ďź Advantages & Disadvantages
ďź TOP VC Funds In India & Their Investments
3. What is Venture Capital?
⢠Venture capital (VC) is money invested in startups or small businesses with high-
growth potential.
⢠Venture Capital is a financing tool for companies and an investment vehicle for
wealthy individuals and institutional investors. Wealthy investors like to invest their
capital in startups with a long-term growth perspective.
⢠This capital is called Venture Capital and the investors are called Venture capitalists.
4. Definition of Venture Capital
According to SEBI (Venture Capital Funds) Regulations, 1996, a venture
capital fund is a fund established in the form of a trust or company
including body corporate and registered under this regulation that has a
dedicated pool of capital raised in a manner specified in the regulations
and invests in accordance with these regulations.
5. FEATURES OF VENTURE CAPITAL
⢠High Risk-Return
⢠Long-Term Investment Horizon
⢠Lack of Liquidity
⢠Private Equity
⢠Wide Scope
⢠Equity Participation
There are 157
Registered
Venture
Capital Funds
in India
6. STAGES OF VENTURE CAPITAL
EARLY STAGE
⢠Market research
⢠Business plan
development
⢠Setting up a
management team
⢠Product development
START UP STAGE
⢠Business already under
the development phase.
⢠Establishment of
company or business
⢠Establishment of all the
important members of
the team
⢠Development of business
plan or idea
LATER STAGE
⢠Concrete Visualization of
the Idea takes Place
⢠Commercial sales begun
⢠Financing is for long-
term expansion
⢠Most money is invested
8. Methods of Venture Capital Funding
1. Share in Equity
⢠In exchange for a share
in the equity of the
company
2. Participating in
Debentures
⢠A type of debt
instrument that is not
backed by any
collateral but gives the
investor a right to
participate in the
profit of the company.
3. Conditional Loan
⢠These loans bear no
interest.
⢠Repaid to the investor
in the form of royalties
once the company
seeking financing
generates revenue.
9. ADVANTAGES
⢠High Returns
⢠Helps in raising capital
⢠Participation in Innovation
⢠Launch-Pad for
Entrepreneurship
⢠No Repayment Obligation
DISADVANTAGES
⢠Lack of Liquidity
⢠Long Term Investment
⢠Market Value Determination is
very Difficult
⢠Limited Information
⢠Reduction of Ownership Stake
Advantages & Disadvantages of VC Funding