an overview of venture capital in india by dhanpal jhaveri

Download An Overview of Venture Capital in India by Dhanpal Jhaveri

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StartupCentral Venture Capital Masterclass, July 2012

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  • 1. Venture Capital Master-classJuly 21, 2012
  • 2. MasterclassContentsBasics ofPrivateCapital 2EvolutionofPrivate CapitalinIndia 6VentureCapital:HistoricDealValueandVolume 7IssuesandChallenges 9 2
  • 3. WhatisPrivateEquity? PrivateEquity Publicequity Stockmarket listed companies Buyouts, Venturecapital Laterstagefinancing, Earlystage/Angel Secondaries financing Bydefinition:PrivateEquityistheprovisionofequitycapitalbyfinancialinvestors overthe mediumorlongterm tononquotedcompanieswithhighgrowthpotential Privateequityisilliquid,ownershipisconcentrated,valuationisdifficult,intermediariestendtobe small,financeisaccompaniedbycontrolandmentoring Publicequityisliquid,ownershipisdispersed,valuationisrelativelyeasy,intermediariesarelarge, financeisoftendivorcedfromcontrolandmentoring VentureCapital,isasubset ofPrivateEquityandreferstoequityinvestmentsmadefor: Thelaunch Earlydevelopment Orexpansionofabusiness VentureCapitalfocusesprimarilyonentrepreneurialundertakingsratherthanonmaturebusinesses Theessentialdifferencebetweenthetwoisthe stageofinvestment 3
  • 4. CorporateDevelopmentandPrivateEquity Lastfinancingroundprior toaninitialpublicoffering IPO/M&A ofacompany Financingtheexpansionof growthcompanies Private ThirdStage Equity Providingworkingcapital fundingandrequired SecondStage financingforyoungfirms duringgrowthperiod Financingthe FirstStage commercializationand productionofproducts Venture Providingcapitalrequired Startup Capital Financing forproductdevelopment andinitialmarketing activities Seed Angel Financing Providingsmallsumsof capitalnecessaryto Funding developabusinessidea 4
  • 5. CompanyLifecycleandInvestmentSizes Slow Growth Late Buyout/restructuring Growth opportunities Size>$20mm Readyforthenext growthorbit Investmentsizestendto increasealongthiscurve Hyper PEstendtobeactive Growth investorsinearlystage GrowthCapital companiesandpassivein Early Sizebetween$10and20 Growth mm moreevolvedcompanies Seed VentureCapital Fund Size

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