IDFC Gilt 2027 Index Fund_Key information memorandum
How to register as a foreign venture capital investor in india
1. SECURITIES AND EXCHANGE BOARD OF INDIA
INVESTMENT MANAGEMENT DEPARTMENT
Division of Funds – Venture Capital
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HOW TO GET REGISTERED AS A FOREIGN VENTURE CAPITAL INVESTOR
1. The Applicant is advised to go through the SEBI (Foreign Venture Capital
Investors) Regulations, 2000 for checking the eligibility criteria (Reg 4) and such
other information while submitting the application to SEBI. The application in
Form A as specified in First Schedule to SEBI (Foreign Venture Capital
Investors) Regulations, 2000 and other documents should be filed along with
requisite fees (Application fees of US $ 2500) as prescribed under Second
Schedule to the Regulations.
2. The application in Form A along with other documents as enumerated below
should be submitted in duplicate. One set of Application along with all the
documents is forwarded by SEBI to Reserve Bank of India (RBI) for its approval
from FEMA angle.
Procedure to be Followed :
3. The Applicant should follow the procedure given below so as to expedite the
registration process. Normally, all replies are sent within 21working days from
the date of getting each communication from the applicant during the process of
registration. Thus, the total time period for registration depends on how fast the
requirements are complied with by the applicant.
4. The following are the main requirements under SEBI (Foreign Venture Capital
Investors) Regulations, 2000:
1. While filling the Form A please ensure the following.
a) Details about the sponsor/group to which the applicant belongs.
In Form A under pt 3 (c), the applicant should disclose the details pertaining
to the sponsor or the group to which it belongs. Also disclose the experience,
approximate funds being managed by the sponsor/group, the registration
particulars with any regulatory agency abroad, along with website details, if
2. any, etc.
b) Details about designated bank branch and Custodian.
Please ensure that the applicant appoints a designated bank and a SEBI
registered Custodian. Also enclose a copy of Letter from the Custodian in
support of Reg. 8(b).
c) Other Documents as prescribed in Form A:
i. Copy of certificate of registration with home regulator; or
ii. Copy of income tax return filed in the home country; or
iii. Copy of bankers certificate fair track record of the applicant
2. Apart from the above, the applicant has to submit the following documents/
details/declarations in support of registration.
a) Contact Person details along with name, address, contact no. and email ID.
b) Details of all the directors along with name, address, proof of identity, proof
of address, contact no and email ID.
c) Copy of Memorandum and Articles of Association/Constitution Document
of the applicant. Please ensure that the main objects permit the applicant to
carry on the activity of venture capital.
d) Structure Diagram of the Applicant.
e) State whether the applicant or any of its directors has not been refused a
certificate by the SEBI Board.
f) State whether the applicant is registered with SEBI or any other regulatory
authority in any capacity in India or has filed for registration with SEBI in any
other capacity.
g) Write up on Directors/Key personnel of the FVCI. The write up should include
the educational qualifications, the past experiences etc.
h) Disclose the investment strategy as required under Regulation 11(a) of the
SEBI (Foreign Venture Capital Investors) Regulations, 2000. The Investment
strategy should disclose the sectors for investment and the approximate
amount proposed to be invested in India along with the Life cycle of the
Fund.
i) Declaration that the foreign venture capital investor will not make investment
in any area listed under Third Schedule to SEBI (Foreign Venture Capital
3. Investors) Regulations, 2000.
j) Declaration in respect of “Fit and Proper Person” criteria as per regulation
4 A of the SEBI (Foreign Venture Capital Investors) Regulation, 2000 and as
specified under Schedule II of the Securities and Exchange Board of India
(Intermediaries) Regulation, 2008.
5. Grant of Certificate of Registration
Once all above requirements have been complied with including the Fit and
Proper Person Regulations, 2004 and necessary approvals have been
granted by RBI, SEBI will issue a letter stating the same and on payment of
requisite fees (registration fees of US $ 20,000) as per Second Schedule to
Regulations, SEBI will grant a certification of registration as a Foreign
Venture Capital Investor.
Please note the following:
• Application (in 2 sets) which is incomplete or without the necessary documents/
information/declarations would not be accepted and they would be treated as not filed.
However, an intimation to this effect will be addressed to the applicant within
reasonable period of time.
• Applications involving policy decisions or other considerations, might get delayed in
processing and in getting registration approvals.
• Documents/annexures submitted along with the application need to be numbered and
duly signed.
• In case of an Authorized signatory, please submit an authorization letter from the
Directors of the Fund.
• The application in Form A along with all the necessary information as enumerated
above will be addressed to The DGM, Division of Funds-Venture Capital, Investment
Management Department, and forwarded to our T&A Division, SEBI, Plot No. C4-A, “G’
Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051. Such applications will
be submitted along with the demand draft of US $ 5000 towards application fees paid in
favour of SEBI, Mumbai.
4. FIRST SCHEDULE
FORM A
SECURITIES AND EXCHANGE BOARD OF INDIA
(FOREIGN VENTURE CAPITAL INVESTORS) REGULATIONS, 2000
(REGULATION 3)
APPLICATION FORM FOR GRANT OF CERTIFICATE OF
REGISTRATION AS FOREIGN VENTURE CAPITAL INVESTOR
WITH THE SECURITIES AND EXCHANGE BOARD OF INDIA
SECURITIES AND EXCHANGE BOARD OF INDIA
Plot No. C4-A, “G’ BLOCK, BANDRA KURLA COMPLEX,
BANDRA (EAST), MUMBAI – 400051
INDIA
1. Name, address, telephone no., telex no. and fax no. of the applicant. In case the
applicant has a representative office in India, the particulars may also be given for that
office.
2. Please indicate whether the applicant belongs to any one or more of the following
categories:
Pension Fund, Mutual Fund, Investment Trust, Investment company, Investment trust,
Investment partnership, Asset Management Company, Investment manager,
Investment Management Company, Endowment fund, University fund, Charitable
institutions or any other investment vehicle incorporated and established outside India
3. a) The date and place of incorporation of the applicant. (Details of statute under which
incorporated).
b) Brief description of the principal activities of the applicant and the year of
commencement of such activities.
c) Brief description of the group, if any, to which the applicant belongs.
4. Whether any of the following documents are submitted?
i. Copy of certificate of registration with home regulator; or
ii. Copy of income tax return filed in the home country; or
iii. Copy of bankers certificate fair track record of the applicant
5. Please also state whether there has been any instance of violation or non-adherence to
the securities laws, code of ethics/conduct, code of business rules, for which the
applicant, or its parent/ holding company or affiliate may have been subjected to
economic, or criminal liability or suspended from carrying out its operations, or the
5. registration has been revoked, temporarily or permanently. If no, submit an undertaking.
6. Please indicate the names of the clients on whose behalf you propose to invest in India.
7. Please indicate the manner in which you propose to conduct your investments in India
i.e. whether through an establishment in India or through any other office outside India.
Please give details, and also the name of the contact person/compliance officer.
8. Name and address of the designated bank branch in India through whom investment is
proposed to be made.
9. a) Name, address, telephone no., telex no., and fax no. of the domestic custodian.
Please also present the background information on the custodian, including volume of
business handled, organisational infrastructure and the number of investment
companies for which the domestic custodian is acting, or has acted, as custodian.
b) Particulars of the agreement entered into with the domestic custodian.
We hereby agree and declare that the information supplied in the application, including the
attachment sheets, is complete and true.
AND we further agree that we will immediately notify the Securities and Exchange Board of
India of any change in the information provided in the application.
We further agree that we shall comply with the provisions of the Act, and regulations issued
thereunder and all other relevant laws.
We further agree that as a condition of grant of certificate of registration, we shall abide by
such operational instructions/ directives as may be issued by Securities and Exchange
Board of India under the provisions of the Act from time to time.
For and on behalf of_____________________________________
(Name of the applicant)
Authorised Signatory ___________________ ___________________
(Name) (Signature)
Date:
Place:
6. Note:
1. Securities and Exchange Board of India (SEBI) reserves the right to call for any further
information from the applicant regarding his application.
2. Applications, superscribed "Application for Registration of Foreign Venture Capital
Investors ", should be submitted in duplicate, in sealed envelopes, at Securities and
Exchange Board of India's office.
Documents to be enclosed with the application:
a. Documents to support registration or regulation by a Securities Commission and / or
Self Regulatory Organisation, or any other appropriate regulatory/registering authority
or
b. Copy of income tax return filed in the home country; or
c. Copy of bankers certificate for fair track record of the applicant
7. SMOOTH RIDE TO
SMOOTH RIDE TO
VENTURE
CAPITAL
VENTURE CAPITAL
How to Get VC Funding
for Your Business
PANKAJ SAHAI
PANKAJ SAHAI
8. How to Get VC Funding for Your Business
SMOOTH RIDE TO
Have you got a great business idea but not enough money to translate into a reality?
Have you got a small ongoing venture that can grow truly big if only you had the
money? Is your venture at too early a stage such that banks won’t fund you? In
all such cases, you can grow your venture, create immense wealth and realise all
your entrepreneurial dreams by using venture capital to fund your business.
This is the first comprehensive handbook of venture capital funding for Indian
entrepreneurs. It deals with the whole gamut of issues related to the complex,
multi-dimensional subject of venture capital in a simple and engaging manner.
Using first person narrative, it explains lucidly all the concepts and intricacies
VENTURE CAPITAL
of the venture capital raising process and guides the entrepreneur step-by-step,
revealing the secrets of success at every stage of the process:
How is venture capital different from other sources of financing?
How does the VC make money by investing in my business?
How should I create my business plan to present to the VC?
How will the VC value my business?
How should I negotiate with the VC?
How can I protect my interests once a VC funds my business?
What legal agreements will I have to sign with the VC?
How and when will the VC exit from my business? Would I have
to pay him to do so?
This authoritative handbook is a must for ambitious entrepreneurs, business
managers, management consultants, business advisers and finance professionals
alike.
PANKAJ SAHAI is a New Delhi based management consultant, entrepreneur
PANKAJ SAHAI
coach, mentor and adviser. He is the founder of VentureAhead.com, an
entrepreneur support and coaching portal, an enabling marketplace for
ventures in need of strategic capital and partners. Previously, he worked, in
responsible positions in India and overseas, with multinationals like Price
Waterhouse, Ernst & Young, Schlumberger and Citibank, before becoming
part of the core entrepreneurial team of shareholder-directors at IIS Infotech Ltd, a software
services start-up, which was subsequently sold to FI Group Plc. (now Steria–Xansa).
Pankaj Sahai is a Chartered Accountant (India) and a Chartered Management Accountant
(United Kingdom).
Rs. 495
INVESTMENT
www.visionbooksindia.com
9. PANKAJ SAHAI is a management consultant, entrepreneur
coach, mentor and adviser. He is an entrepreneurial manage-
ment professional possessing the repertoire of skills to start,
grow and exit business ventures. He works through a network
of professional relationships, and uses his hands-on entrepre-
neurial experience of start-ups, financial and legal expertise,
abiding interest in HR and psychology, knowledge of venture
mechanics and understanding of the sweat and tears of entre-
preneurship, to provide professional advisory services to ven-
tures at various stages of growth.
Previously, he worked in responsible positions, in India and
overseas with multinationals like Price Waterhouse, Ernst &
Young, Schlumberger and Citibank before moving into the en-
trepreneurship domain by joining the core management team of
shareholder-directors at IIS Infotech Ltd., a software services
start-up which was subsequently sold to FI Group Plc (now
Steria-Xansa). After exiting, he founded VentureAhead.com, an
entrepreneur support and coach portal, an enabling marketplace
for ventures in need of strategic capital and partners. He is also
the founder of VentureFeedback.com, an online surveys and
tests portal which enables small businesses and others to con-
duct market and HR surveys and tests conveniently and eco-
nomically.
He is a Chartered Accountant (India) and a Chartered Man-
agement Accountant (United Kingdom). Before earning his
professional qualifications, he did his schooling from St.
Columba’s High School and then studied at Shri Ram College
of Commerce and obtained the Bachelor of Commerce (Hon’s.)
degree from Delhi University. He lives in New Delhi. He may
be contacted at pankajsahai@gmail.com or +91 98110 21090.
12. How to Get VC Funding for Your Business
PANKAJ SAHAI
13. This book is dedicated to my parents,
Late B. M. Sahai, “the wise one”
and
Shakuntla Sahai, “the super mom”
For teaching me by example to how to
navigate life happily,
carrying family and friends alongside.
14. Contents 5
Contents
Preface 7
Ground Zero
Venture Capital Raising Plan 11
Part I
How the Venture Capital Industry Works
1. What is Venture Capital? 19
2. How the Venture Capital Industry Operates 27
3. How VCs Make Money 33
4. Are All VCs the Same? 42
5. The VC Investment Process 51
Part II
Assessing Your Readiness for Venture Capital
6. Do I Need Venture Capital? 59
7. Getting Over the Fear of the VC 64
8. To What Kind of Business do VCs Provide Money? 70
9. The Process of Raising Venture Capital 74
Part III
Preparing
Preparing for the VC
10. Hiring Advisers 83
11. Doing an Internal Review of Your Business 92
}
15. 6 Smooth Ride to Venture Capital
12. Doing a Growth Audit 105
13. Determining the Strategic Direction of Your Business 111
14. Building Your Board of Directors and Advisory Board 130
15. Understanding Ownership, Dilution and Rounds of Financing 139
16. Determining the Valuation of Your Business for VC Funding 155
17. Creating Your Funding Plan 171
18. Creating Your Business Plan 175
19. Creating the Elevator Pitch and the VC Presentation 210
Part IV
Negotiating and Structuring the Deal
20. Selecting and Meeting the VC 219
21. Preparing to Negotiate with the VC 228
22. Negotiating the Term Sheet 235
23. Managing the Due Diligence 263
24. Closing the Deal 270
Part V
Managing the VC Relationship
25. Getting Along with the VC 279
26. Exiting Profitably 291
Part Vi
Appendices
Appendix 1: History of Venture Capital in the US 301
Appendix 2: Venture Capital Industry in India 305
Appendix 3: Corporate Venture Capital 310
Appendix 4: Glossary of VC Terminology and Slang 314
Appendix 5: Recommended Reading 330
Index 334