A

Presentation
On in-depth Analysis of
Venture capital industry in India
Presented To:
Hemchandracharya North Gujarat University

Presented By:
Sachin Nandha (41)
Jignasha Parmar (44)
Darshan Shah (48)
Disha Shah (49)
Priyank Shah (52)
 When You Need It
When You Don’t

 It is a one type of fund to provide the

money to risky and young business for
exploiting opportunities and obtaining
capital gain.
 VENTURE CAPITAL SPECTRUM

Building a sustainable business

IPO

Expansion

Product
Start up
Development

Business
Plan
Concept Time

Venture Private Public Public Equity for

Seed Capital
Family Angel Capital Equity Equity Restructuring Buyouts
Personal
Partners Investor
 VENTURE CAPITAL & ALTERNATIVE
FINANCING COMPARISON
Private Placement, Venture Capital
IPO,vendor
High financing, state
funding, strategic
alliance, parent
company finance

Angel investment, Bootstrapping

licensing self ( factoring, trade credit,
Low funding, friends, leasing ), micro
family, loans, financing
Community bank debt, sell some
assets, business
credit card
Low Level of Risk High
PES-G ANALYSIS
 INDUSTRY LIFE CYCLE

16000
14000
14234
Growing of
12000 DOT COM bust Economy at 7-8%
10000 & NASDAQ lost GDP
VALUE OF DEALS(US$bn)

60% value
8000
7500
6000
4000 2200
1650
2000 1160 937 591 470
0
2000 2001 2002 2003 2004 2005 2006 2007
 POLITICAL FACTORS

Particulars Favorable Unfavorable Both

entry/exit for foreign 

venture capital firm
Controller of Capital Issue 

Relaxation in IPO norms 

Taxes on emerging sector 

 ECONOMIC FACTORS
Particulars Favorable Unfavorable Both
Sensex crash down, NO. of 
IPO & M&A deal decrease

No. of S.S.I 

G.D.P 

Inflation 

Interest Rate 

Currency Rate 

Export & Import 

 Socio-cultural Factors.
Particulars Favorable Unfavorable Both
Youth & Unemployment 

Rate
Lack of skills in marketing, 

business development
Hesitant to give up control 

Origin of immigrant 

Entrepreneur
 GEOGRAPHIC FACTOR

 Emerging cities
Five Force Model
RIVALRY AMONG COMPETITORS (MODERATE TO HIGH)

Particulars Low Low Moder Modera High

To ate te To
Moder High
ate
Fragmented industry 

Investment pattern 

Effect of 
Globalization
Fast growing market 

Emerging sectors 
BARGAINING POWER OF SUPPLIERS(HIGH)
Particulars Low Low Moder Modera High
To ate te To
Moder High
ate

Risky Business 

Stake Holders’ Impact 

Influence Of Investment 
Preferences

Effect Of Change In 
Rates
BARGAINING POWER OF BUYERS(LOW)
Particulars Low Low Moder Modera High
To ate te To
Moder High
ate

Project based decision 

SENSEX crash down 

When buyer borrows 

Management support 
 Stage Wise Substitutes
Stages Early stage Start up stage Expansion
stage

Substitute Angel investors IPO Bank

Friends & family Preference IPO

shares
IPO Debentures Parent firms

Private placements Bank loan FDI

THREAT FROM SUBSTITUTES ( Low To Moderate)
Particulars Low Low Moder Modera High
To ate te To
Moder High
ate

Substitute at early stage 

financing
Substitute at start up 
stage
Substitute at expansion 
stage
working capital 
management
THREAT FROM NEW ENTRANTS ( Low)
Particulars Low Low Moder Modera High
To ate te To
Moder High
ate
Capital Requirements 

High Risky Business 

Exit route barriers 

Learning and 
experience curve effect
Time constraint 
 DRIVING FORCES

 Growth of Small Scale industries.

 Development of technology, especially IT and
communication.
 Development of financial markets.
 State of the economy.
 Development of political climate for the economy,
Globalization.
 KEY SUCCESS FACTOR

 Knowledge about changes in Govt. policies.

 Quick Response time.
 Knowledge about Global Environment.
 Intellectual assets.
 •Balance between three factors

MAGIC TRIANGLE
Financial markets and the
industries to invest in

Knowledge

Risk management skills Possible investees and

and contacts to investors external expertise
 GE-9 – CELL MATRIX
10

High
1 1 2
Industry Attractiveness

6.7 APIDC,AVISHKAR IVCF

ICICI

1
Moderate

2 3
UTI

3.3

2 3 3
Low

10
High 6.7 Moderate 3.3 Low 0

Business strength
 Is an indian venture Capital Attractive?

•Favorable
Firm strategy,
structure and
rivalry
•Favorable

Factor Demand
Condition Conditions
s
•Favorable

Supporting
Industries •Favorable
VALUE CHAIN ANALYSIS
 OPPORTUNITIES AND THREATS
 OPPORTUNITIES
 Initiatives taken by the Government in formulating policies
to encourage investors and entrepreneurs.
 SME growth

 Economic growth

 Emerging cities

 Emerging sectors for investments.

• Clean technology.

• Biotechnology.

• IT/ITeS Industry.

• Electronic industry.

• Pharmaceuticals Industry.
 THREATS
 Venture Capital Market in India Getting
Overheated.
 Taxes on emerging sectors

 Exit route

 Unproductive work force

 Contemporary issues
 IIM-A Eyes venture capital to fund its incubators
 Buoyed by the growing tribe of students wanting to go solo
with their own entrepreneurial venture, the Indian Institute
of Management, Ahmedabad (IIM-A) is looking to attract
venture capital funds to the campus.
 The number of students starting up their own venture is
increasing in every batch. In a batch of 250 students, at
least 10-15 are starting their own ventures.
 Angel investors betting big on Indian start-ups
 A slowdown in global venture capital investments, Indian
start-up firms are emerging as clear favourites for seed
capital among global angel investors.