2. Venture Capitalist
Venture Capital firms are often limited partnerships
Company Portfolio
Most Venture Capital comes from a group of wealthy
investors, investment banks and other financial
institution.
Downside of entrepreneurs.
Most VC firms have different kinds of executives:
general partners, limited partners, venture partners
apart from associates and office staff.
By:- Vishrut Ghate

3. Venture capital is not solely an injection of fund
into a new firm.
-Input of skills.
-Designing Market strategy
-Organizing & Managing the firm
Venture capital may be at any stage of
business/production cycle
By:- Vishrut Ghate

4. How do Venture capitalists
generate money?
Return on Investment from Portfolio
Companies
100%
80%
60%
40%
Return on
20% Investment
from Portfolio
0% Companies
-20%
-40%
A Ltd B Ltd C Ltd D Ltd E Ltd
By:- Vishrut Ghate

5. How do Venture Capitalists select
companies to invest in?
In 2009, Flipkart has raised funding
from venture capital funds Accel
India .
Tiger Global (US $10 million in 2010
and US $20 million in June 2011)
By:- Vishrut Ghate

6. Financing Stage Period (funds Risk Activity to be financed
locked in Perception
years)
Early stage 7 to 10 Extreme For supporting a concept or
finance Seed idea or R & D for product
development.
Start up 5 to 9 Very high Initializing operations .
First stage 3 to 7 High Start commercial production
and marketing
Second stage 3 to 5 Sufficiently Expand market & growing
high working capital need.
Later stage 1 to 3 Medium Market Expansion,
finance acquisition & product
development for profit
making company.
Buy out-in 1 to 3 Medium Acquisition financing
Turnaround 3 to 5 Medium to Turning around a sick
High company.
Bridge Finance 1 to 3 Low Facilitating public issue.
Table: Venture Capital- Financing StagesVishrut Ghate
By:-

7. Investors
Screening
Venture
Management Fund Selection
Prospective Investee Structuring
Monitoring
Exit
By:- Vishrut Ghate

8. • Angel and angel clubs
With average deals sizes from USD 100,000 to USD 500,000
they finance companies in their early stages.
Examples for angel clubs are · Media Club, Dinner Club ,·
Angel's Forum.
• Small and Upstart Venture Capital Funds
They are also called as "Boutique firms". Their capitalization is
about USD 20 to USD 50 million.
Examples are: · Artemis Comaford· Abbell Venture Fund.
• Medium Venture Funds
They provide money for deals up to USD 250 million. Single
funds have up to USD 5 billion under management. An example
is Accel Partners.
By:- Vishrut Ghate

9.  Large Venture Funds :
They often operate internationally and finance deals upto USD
500 million .Examples are: ·AIG American International
Group, 3i, Cap Vest Man.
 Corporate Venture Funds :
These Venture Capital funds are set up and owned by
companies. A company invests in a venture that is similar from
its core business. Examples are: Oracle, Adobe, Dell.
By:- Vishrut Ghate

10. Few reasons for which active Venture Capital
Industry is important for India include:
• Innovation
• Job creation
• Patient capital
• Creating new industry clusters like
Media, Retail.
By:- Vishrut Ghate

11. • The Fund has been subscribed by Small Industries
Development Bank of India (SIDBI), Karnataka State
Industrial Investment & Development Corporation Limited
(KSIIDC) & Karnataka State Financial Corporation (KSFC)
in 1999.
• It has returned 38% of the money subscribed by the three
institutions.
• The Fund has invested in 13 companies with investment of
Rs 12.08 crore.
• The cumulative turnover of the assisted companies is about
170 crore.
By:- Vishrut Ghate

12. • ‘SIDBI’ is the apex Financial
Institution for the Small Scale
Sector.
• The Bank has been investing
in several Venture Capital
Funds for investments in the
SME sector.
• These include funds such as
India Leverage Fund, India
Advantage Fund, and India
Development Fund.
By:- Vishrut Ghate

13. • Venture capitalists are also human beings with
their own share of mistakes.
• Some investors will overpromise you.
‘AVOID IT’.
• Check the source of Venture capital firm.
• They may get greedy and allow you to play
with equity.
• Do not get entangled with people who want a
quick and easy way out.
By:- Vishrut Ghate

14. • Do not seek love at first sight. Establish a comfort
level.
• Do not try to impress Venture Capitalist. Be Honest.
• Consult Chartered Accountant before going to VC.
• Do a Market research before meeting VC.
• VC wants to hear that you have a potential customer.
• VC is looking at the team before looking at the idea.
• Know your competitive landscape.
By:- Vishrut Ghate

15. By:- Vishrut Ghate