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To understand the financing of projects through venture

financing
To learn the working of venture financing in India. To analyse the merits and demerits of venture financing To evaluate the venture financing To study various venture financing institutions that

facilitate the entrepreneurial financing.

Research design : exploratory study

Data source: secondary data


internet newspaper IVCA report

VENTURE CAPITAL An Undertaking Amount invested by the person/s to carry out the

newly established OR business

Venture capital is the financial support to young,

rapidly growing companies/ individuals that have potential to develop into significant economic contributors by the Business men/ Group to create a product or service which has a unique idea
JJDC is the venture capital subsidiary of Johnson &

Johnson
Venture capital means funds made available for start

up firms and small businesses with exceptional growth potential

Long time horizon

Lack of liquidity
Finance new and rapidly growing companies Finance to Smaller and Less Mature companies

Provided at earlier Stage


Participation in management High risk

Maximum utilization of available resources

To bridge the gap b/w Capital and Knowledge

Need of Venture Capital


To Society/Economy To Venture Capital Undertakings

To Investors

invests in venture capital undertaking in accordance

with the regulations. raised in a manner specified in the regulations, and has a dedicated pool of capital As per SEBI (Venture Capital Funds) Regulations, 1996Venture capital fund means a fund established in the form of a trust or a company including a body corporate and registered Under these regulations which A venture capital fund refers to a pooled investment vehicle that primarily invests the financial capital of third-party investors in enterprises

The investors that put money into their funds became

less aggressive during recession so it was harder for the VCs to raise money. With less opportunities for getting ROI investors tend to scale back, adjust their investment focus and/or get more picky in funding companies. The down market virtually closed the IPO market for emerging companies.

The Seed stage

The Start-up stage


The Second stage The Third stage

The Bridge/Pre-public stage

In India, venture capital funds (VCFs) can be categorized into

the following groups:-

Promoted by the Central Government controlled development

finance institutions, for example:

SIDBI Venture Capital Limited (SVCL) IFCI Venture Capital Funds Limited (IVCF)

Promoted by State Government controlled development finance

institutions, for example:


Gujarat Venture Finance Limited (GVFL) Kerala Venture Capital Fund Pvt Ltd. Punjab Infotech Venture Fund Hyderabad Information Technology Venture Enterprises Limited (HITVEL)

Promoted by public banks, for example: Canbank Venture Capital Fund SBI Capital Markets Limited Promoted by private sector companies, for

example:
IL&FS Trust Company Limited Infinity Venture India Fund

Overseas venture capital fund, for example: Walden International Investment Group SEAF India Investment & Growth Fund BTS India Private Equity Fund Limited

Taking the role of AAVISHKAAR (as a venture capitalist)

Shri Kamdhenu Electronics Private

Ltd

AAVISHKAARS ROLE SKEPL was the second project funded by Aavishkaar in

April 2003 with a total investment of 18 lakhs in equity. Through this investment, Aavishkaar received a 26.62% stake in the company. Aavishkaar has been working closely with SKEPL in improving financial discipline and cost control. The team has been integral in developing the creation of an MIS system that has helped the SKEPL management team improve their internal processes and systems. Also, Aavishkaar has provided access to a network for business development. Aavishkaar also continually provides advice and networking support to SKEPL on an as needed basis, as well as working with SKEPL on negotiations with potential investors.

Based on various bservation the following outcomes were

identified: Good business strategies business development and negotiating partnerships Building stronger management skills with 26% Aavishkaar Networking,ownership Usefulness of product Behaviours/Actions: Increased publicity Decreased risk profile has improved credibility among dairy cooperatives Breakeven with profit potential within the next year Ultimate benefits: Created a more efficient dairy sector Time savings results in other income generating options Greater asset accumulation as dairy farmers own their animals

CONCLUSION

Applying Aavishkaars logic model to the outcomes

drawn from interviews, surveys and focus groups suggests that investing in SKEPL has had a positive social impact on the dairy farmers, and their communities.

It injects long term equity finance which provides a

solid capital base for future growth. The venture capitalist is a business partner, sharing both the risks and rewards. Venture capitalists are rewarded by business success and the capital gain.

The VC should be easily available to the young

entrepreneur The process of obtaining VC should be more simplified and more easy to obtain. The new ideas and capability should be entertained and not only the experience of the entrepreneur

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