It is just story of the man with the

Idea and the man with money.

 Venture capital finance is often though of as
‘the early stages of financing new and
young enterprises seeking to grow rapidly.”
Finance may be required for the start-up,
development/expansion or purchase of a
company.
 This fund provided on high risk high return
basis.
 Equity Participation- Direct purchase
share or Convertible Securities
(Debenture, Bound etc.)
 Long Term Investment- 7 to 10 years
 Participation in management-
 Seed - to prove concept or idea

 Start-up - product development & market testing

 First stage - commercial production (manufacturing & sales)

 Second stage - expansion to scale (working capital)

 Third stage - expansion of profitable enterprise

 Last stage - preparation for going public

 Securities & Exchange Board of India (SEBI) regulates both
Domestic Venture Capital Funds (DVCFs) & Foreign Venture
Capital (FVC) Investors.
 Income passes through to investors without tax when
Trusts are registered under the Indian Trust Act & Venture
Capital Companies Act
 FVCIs freely remit funds to India for investments in Indian
venture capital undertakings (VCUs) & SEBI registered
domestic venture capital fund (DVCF)
 Reserve Bank of India (RBI) give Grant general permission
to start venture capital fund in India.
 Snapshot of Indian Ve nture Capital Scenario
12000 10000
10000
Total Invested ($

8000
millions)

6000
4000
1200 1100 1050
2000 20 80 250 500
0

97 98 99 00 01 02 03 st)
96- 97- 98- 2 0 00- 01- 02- a
1 9 1 9 1 9 99- 2 0 2 0 2 0 rec
1 9 F o
(
08
07-
Year 2 0