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Venture Capital
Amit Kishor Sonal Kandeka 4/28/12 Sampat KadamYogesh Kadam

of "Risk Capital". In other words, capital that is invested in a project (in this case - a business) where there is a substantial element of risk relating to the future creation of profits and cash flows. Risk
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Introduction to Venture Capital Venture Capital is a form

Features of Venture Capital Equity Participation

Long Term Investment
Venture Financing is potential equity participation through direct purchase of shares, options or convertible solutions. Venture financing requires long-term investment attitude that necessitates the Venture Capital Firms (VFCs) to wait for a long period, say 5 to 10 years to make large profits. Participation in Venture financing ensures continuing Management participation of the venture capitalist in
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Development in INDIA This concept was introduce in India

in 1987. It was operated by I ndustrial D evelopment B ank of I ndia . I ndustrial C redit and I nvestment C orporation of I ndia was also started venture capital Government started levied 5% cess activity in the same year . on all payment related to venture fund. 4/28/12

Venture Capital Investment Stages

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Se ed

Cont

Venture Capital Investment Stages Seed Money: Low level financing needed to
prove a new idea. stage firms that need funding Start up: Early for expenses associated with marketing and product development. First Stage: Early sales and manufacturing funds. Second Stage: Working capital for early stage companies that are selling product, but Also called Mezzanine Third Stage: not yet turning a profit.Financing, this is expansion money for a newly Stage: Also called Fourth profitable company.bridge financing, 4th round is intended to finance 4/28/12

Process of Venture Financing

Scree ning

Evalu ation Appro val

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Methods of Venture Equity Financing

A venture capitalist get the status of an owner and becomes entitled to a share in the firms profits as much as he is Conditional Loan liable for losses. A conditional loan is repayable in the form of a royalty after the venture is able to generate sales. Income Note

It is a hybrid security combinations of conventional loan and conditional loan.

Others

Participating Debenture, Convertible Loan, Preferred Ordinary Shares, Special 4/28/12

Venture Capitalist
A venture capitalist (also known as a VC) is a person or investment firm that makes venture investments, and these venture capitalists are expected to bring managerial and technical expertise as well as capital to their investments.
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A Venture Capital Fund refers to a pooled investment vehicle that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans. Venture capital firms typically comprise small teams with 4/28/12

Venture Capital Fund

When approaching a VC firm, Business Cycle: their portfolio consider invest in budding or Do they

established businesses? Industry: What is their industry focus? Investment: Is their typical investment sufficient for your needs? Location: Are they regional, national or international? Return: 4/28/12 What is their expected return on

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