16873161 venture capitalist ppt

8/6/2019 16873161 Venture Capitalist Ppt

1/21

ENTUREENTURECAPITALAPITAL

he greatest difficulty in theorld is not for people to accept,ew ideas but to make them forget.--ld ideas Tom Peters


2/21

08/09/11 Indian Institute Of Planning & Management 2

IS IT JUST THE STORY OF THE MAN WITH

THE idea AND THE MAN WITH THE MONEY

?

HAT IS VC FUNDING?


3/21


T IS THE BUSINESS OFMPLOYING CAPITAL P A T I E N T L Y O A X I M I S E R E T U R N S HILE MANAGING-ISKS IN A RELATIVELY HIGH RISK

ENTURE

E R S U S

IMPLY I N I M I S I N G R I S K S OR AURER FIXED RETURN

C F U N D I N G I S


4/21


Venture capitalists are typicallyvery selective in deciding what

;to invest in as a ule ofthumb , a fund may invest in oneof four hundred opportunities

.presented to itFunds are most interested in

ventures with exceptionally high,growth potential as only suchopportunities are likely capable

of providing the financial

returns and successful exit

.ont


5/21


The concept was introduced inIndia in 1987

It was operated by I ndustrialD evelopment B ank of I .ndiaIn the same year I ndustrial

C redit and I nvestmentC orporation of I ndia was alsostarted venture capital.activity

evelopment InIndia


6/21


,romoter s Integrity ,elevant Experience Drive.evelniqueness Of Their IDEA/ocus On Commitment To TheirIDEAigh Entry Barriersompetitive Advantages&ood Market Size GrowthRates cceptable Geographic

Location

C Mainly Looksat?


7/21


Writing a business plan is a processin which the entrepreneur isforced to think about all aspectsof the business

Write it yourselfFocus on

The people, the opportunity /

business model, Risk andrewardWrite down the exit options (theinvestor wants to get moneyout of it as well) but dont focustoo much on the IPO within 3

.ont


8/21


,Depending on your type business the venture.capital firm you approach will differ For

, [ -instance if you're an internet start up],company funding requests from a more

-manufacturing focused firm will not be.effective Doing some initial research on

which firms to approach will save time and. ,effort When approaching a VC firm consider

:their portfolio:Business Cycle Do they invest in budding or

established businesses?:Industry What is their industry focus?:Investment Is their typical investmentsufficient for your needs?

: ,Location Are they regional national orinternational?

ypes of Ventureapital Firms


9/21


Targeting specific types of firmswill yield the best results when

.seeking VC financing The

National Venture CapitalAssociation segments dozens ofVC firms into ways that might

.assist you in your search

It is important to note that manyVC firms have diverse portfolios.with a range of clients If this

,is the case finding gaps in

their portfolio is one strategy

.ont


10/21


11/21


Personal savings -- one can fundthe business from personal

savings or by raising personal

loans offering one s personal .property as collateral securityBootstrapping One can start the

business venture with the

,limited available funds andthen use the profits to further.develop the businessBank loan Banks may come

forward to lend money if the

evenue Streamor VC


12/21


All the above three options aremeant for wealthy individuals

who may not strictly need

external sources for business.funding There is a fourth wayto raise money to start a

business and this is known as

.venture capital Venture capitalis particularly suited if theintending entrepreneur needs

large sums of money to meet big

-start up expenses and has auick business rowth lans

ont


13/21


Venture capital investment firmsraise and pool together money

from nstitutionalnvestors and other igh netorth individuals . Theseventure capital funding firms

quite often provide managerialand technical expertise apart

.from funds for the businessThe venture capital company will

then invest the pooled money ina number of business

enterprises and then expect

.ont


14/21


here are typically sixtages of financing offered,n Venture Capital thatoughly correspond to thesetages of a company's.evelopment. :e e d M o n e y ow levelinancing needed to prove(new idea Often"rovided byngel investors") -nitial capital for a startp venture

rends In VCFunding
http://en.wikipedia.org/wiki/Angel_investorhttp://en.wikipedia.org/wiki/Angel_investorhttp://en.wikipedia.org/wiki/Angel_investorhttp://en.wikipedia.org/wiki/Angel_investor


15/21


. - :S t a r t u p arly stage firmshat need funding for expensesssociated with marketing androduct development . - :F i r s t Ro u n d arly sales andanufacturing fundsapital for a venture that hasuccessfully passed the- .nitial start up phasehe business plan has beenritten and the product is.nder developmentsually provided by informal/nvestors and or seedenture capital firms Often

. . . .ont


16/21


. - :S e c o n d R o u n d orkingapital for early stageompanies that are selling,roduct but not yet turningprofitsually provided by ventureapital firms and

( )nvestment banks Oftensed for marketing purposesnd growth of the company

.ont


17/21


. - :T h i r d R o u n d lso calledezzanine financing , his isxpansion money for a newlyrofitable companyometimes another round ofinancing is necessary .efore being profitable In

ther cases the money issed by profitableompanies to be able toxpand more aggressivelyhan they could do

.ont
http://en.wikipedia.org/wiki/Mezzanine_financinghttp://en.wikipedia.org/wiki/Mezzanine_financinghttp://en.wikipedia.org/wiki/Mezzanine_financinghttp://en.wikipedia.org/wiki/Mezzanine_financing


18/21


. - :F o u r t h R o u n d lso called,ridge financing 4th round isntended to finance the" "oing public processSubsidies ependent on the laws andegulations in a specific, ( - )ountry start up companies

an often apply for subsidyy the public sectorLoansn some cases banks are

illing to provide loans to- . .tart u com anies e for

.ont


19/21


Given the complexities of venture financial,statement analysis determining when a

trend indicates a problem requiring .action can be quite complicated As a, result VCs rely upon a combination of past

experience and pattern matching todetermine how best to interpret and respond

.to different situations.ast Experience In analyzing any one,particular company VCs rely heavily upon

.prior experience One venture investorcharacterized monitoring portfolio companies

. in a similar fashion to looking at art You, ,look at a lot of art some is good some is

. ,ok and some is bad At some point after

,seeing enough art something inside clicksand ou start to a reciate wh certain art

enture Capitalecision Making


20/21


.Pattern Matching In addition to relying ,upon past experience and sense

venture investors rely heavily upon.pattern matching Pattern matching has

been described by one VC as putting

the different tiles together to see.the whole picture Examples of different tiles VCs would consider

:in forming an opinion would includeActivity within the portfolio can help

an investor better understand whether,or not an issue facing one company isaffecting other ones of a similar.stage or sector

Performance of comparable companiesoutside of the portfolio can also be

an indicator of whether or not aparticular issue is unique to the

.ont


21/21


Presented

By:

B.VigneshwarA.Jashwanth

T.Raghu Prem

V.Prathik

V.Srinivas

A.Kiran Kumar

ANK YOUANK YOU

S. Manoj

16873161 venture capitalist ppt

Documents