APROJECT REPORTONA STUDY OF VENTURE CAPITAL IN INDIA

A detailed study done inFINANCESubmitted in partial fulfillment of the requirement for the award of degree of Bachelor of Business Administration (BBA) under Bharati Vidyapeeth Deemed University, Pune.

Submitted by

ARUN RANABBA SEM VROLL NO: 41BATCH: 2011-2014

Under the guidance of PROF.SONALI ATHAWALE

Bharati VidyapeethsInstitute of Management & Entrepreneurship DevelopmentNavi Mumbai(i)DECLARATION I, ARUN RANA student of BHARATI VIDYAPEETH UNIVERSITYStudying in B.B.A (Semester V) hereby declares that I have completed this project report on VENTURE CAPITAL IN INDIA And has Not been submitted to any other University or institutes for the award of any Degree, diploma etc. The information is submitted to me is true and original to the best of my knowledge.

(ii)ACKNOWLEDGEMENT

I would like to express my gratitude to all those who gave me the possibility to complete this project.

I would like to thank my guide PROF.SONALI ATHAWALE for her continuous guidance.

I am thankful to our Director, Dr. DY Patil, for providing me a platform and supporting me towards the successful completion of this project. I also want to thank my class mates who have helped me in getting acquainted with various aspects during the project.

In the end, I express my gratitude to my family who inspired me in doing this work. Without their inspirations the completion of this work was almost impossible.

Signature of the studentARUN RANA

(iv)EXECUTIVE SUMMARY

Venture capital is money provided by professionals who invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors.

The project states the origin of venture capital and their geographical differences in the world. This project is mainly focused on the Indian Venture Capital and the rules and regulation in India under which venture capital industry works. SEBI has the main regulatory authority which controls the working of the Venture Capital in India. Various Venture capital firms and funds have also been explained in this project.

The scenario of venture capital in India and its future has been discussed in the project and also states the Suggestions for the growth of venture capital Funds in India. The Indian venture capital industry, at the present, is at crossroads. There are some major issues faced by this industry which are as follows, like Limitations on structuring of venture capital funds, Problem in raising of funds, Absence of angel investors, Limitation on investment instrument, Limitation on Exit Mechanism, Legal framework, etc.

Venture capital industry in India is still in its early stages and to give it a proper fillip it is important to develop related infrastructure as has been successfully done internationally specially in US, Taiwan and Israel. Following areas need due attention. The Venture Capital market in its nascent stage so, there is a good scope for the venture capitalist in India in near future.

The Indian government has been highly supportive of growth in technology and knowledgebased sectors. All VC funds registered with SEBI are exempted from income tax. The benefits received by contributors to the VC funds are also tax exempt. The government has opened up new sectors for venture funding like real estate, bullion. FDIs have been proposed through automatic route for venture funds like biotechnology. Technology based companies have always been the anchors for venture capitalists.(v)TABLE OF CONTENTS

PARTICULARS PAGE NO: Declaration(i)Acknowledgement(ii)Certificates(iii)Executive Summary(iv)Table of Contents(v)Chapter 1: Introduction of the Project11.1: Concept & Significance of the Study21.2: Objective of the Study41.3: Scope and Limitations51.4: Literature Review6

Chapter 2: Venture Capital72.1: Meaning & definition82.2: Origin.92.3: Stages Of Venture Capital102.4: Feature.122.5:Function Of Venture Capitalist.132.6: VC Investment Process.152.7:How does VC Industry Work182.8What does a venture capitalist look for202.9Geographically differences212.10Advantages & Disadvantages23

Chapter 3: Venture Capital In International Area253.1: Present state of venture in International area263.2: VC in developing countries28Chapter 4: Venture Capital in India304.1 Introduction314.2: Initiative in India344.3 Method of Venture Financing in India.354.4 Regulatory frame work of venture capital in India364.5 SEBI Regulation384.6 VC Industry wise segmentation414.7Future of VC In India424.8 Prerequisites to success of VC in India43

Chapter 5: Research Methodology445.1 Research Design455.2: Data Collection Techniques and Tools465.3: Sample Design47

Chapter 6: Data Analysis and Interpretation48

Chapter 7: SWOT Analysis Of Indian VC56

Chapter 8: Finding, Suggestions, Conclusion59AnnexureBibliography

Chapter1Introduction Of The Project

1.1 Concept Of Venture CapitalThe term venture capital comprises of two words that is, Venture and Capital.. Venture is a course of processing, the outcome of which is uncertain but to which is attended the risk or danger of loss. Capital means recourses to start an enterprise. To connote the risk and adventure of such a fund, the generic name Venture Capital was coined Venture capital is considered as financing of high and new technology based enterprises. It is said that Venture capital involves investment in new or relatively untried technology, initiated by relatively new and professionally or technically qualified entrepreneurs with inadequate funds. The conventional financiers, unlike Venture capitals, mainly financeproven technologies and established markets. However, high technology need not be pre-requisite for venture capital Venture capital has also been described as unsecured risk financing. The relatively high risk of venture capital is compensated by the possibility of high returns usually through substantial capital gains in the medium term. Venture capital in broader sense is not solely an injection of funds into a new firm, it is also an input of skills needed to set up the firm, design its marketing strategy, organize and manage it. Thus it is a long term association with successive stages of companys development under highly riskyinvestment conditions, with distinctive type of financing appropriate to each stage ofdevelopment. Investors join the entrepreneurs as co-partners and support the project with finance and business skills to exploit the market opportunities. Venture capital is not a passive finance. It may be at any stage of business/production cycle, that is, start up, expansion or to improve a product or process, which are associated with both risk and reward. The Venture capital makes higher capital gains through appreciation in the value of such investments when the new technology succeeds.

Significance of Study

This research project will provide help to those people who are investing in venture capital firms.

It also provides help to the investors to know the current scenario of venture capital firms.

As we all know that Venture capital is long-term risk capital to finance high technology projects which involve risk but at the same time has strong potential for growth.

Venture capital is money provided by professionals who invest alongside management. In young, rapidly growing companies that have the potential to develop into significant economic contributors.

1.2 Objective of the study :

The objective of this work is to outline the present status of the venture capital industry in India and to find the changes that could be effected in the present environment to enable venture capital grow at a fast pace and accelerating the economic growth.

1. To understand the concept of venture capital.

2. To identify the major players in the Indian Venture capital Industry.

3. To study and examine the present status of venture capital financing in India.

4. To study the awareness of venture capital in India.

5. To identify the problems faced by the Indian venture Capitalists.

6. To study the future of venture capital in India

7. To suggest various measures for proper growth of venture capital financing in India.

1.3 Scope Of The Study

The scope of the research includes information about venture capital firms in India and Venture capital companies and funds irrespective of the fact that they are registered with SEBI of India or not are part of this study. The study will be conducted within the area of Navi Mumbai.

Limitation of the Study

1. The biggest limitation was time because the time was not sufficient as there was lot of information to be got & to have it interpretation.

1.4 Literature Review

According to Chary, (September 2005)

There has been a plethora of literature on venture capital finance, which is helping the practitioners viz., venture capital finance companies and fund manage for better understanding the role of venture capital in economic development. There are number of studies on the venture capital and activities of venture capitalists in developed countries.

According to Vijaya lakshman& Dalvi,((Jan., 2006)

Whenever Indian policy makers have to encourage any industry. The usual practice is to grant that the industry tax breaks for a limited period. This definitely acts as a positive incentive for that industry. However, what is required is a through hunderstanding of the industry requirement framing and implementation of aggregative strategy for its development. VC funds are not even registered with SEBI in spite of all the benefit available. VC industry is one, which will today prepare abase for a strong tomorrow. What is need for the development of VC industry is not only tax breaks but simpler procedures legislation for simplified exit form investment,more transparency and legal backing to participate in business amongs to other things.

According to Kumar, (July, 2005)

One of the integral aspects of venture funding is venture capitalist's involve ment with the entrepreneurial team. The relationship through broad interaction was explored by Rosenstein (1988). A comparison was drawn between small and large firms with regard to board interaction. While it is important in large firms the relative power of small conventional firms, board interaction generally is undermined. Rosenstein et. a.(1993) studied the finer aspects of boards in the venture funded companies in the USA. From 98 candidates in the sample, the study attempted to bring out t37he changes in the board size, board composition and control and their relation to value added to the funded unit. The empirical analysis yielded results wherein the size of the board increased after venture funding, indicating more transparency in board operations. Through a case based approach Lloyd et. al. (1995) explored the aspect of deal structuring and post investment staging of venture capitalists through venture.

Chapter : 2Venture Capital

2.1 Meaning Of Venture Capital

Venture capital is money provided by professionals who invest along side management in young, rapidly growing companies that have the potential to develop into significant economic contributors. Venture capital is an important source of equity for start-up companies. Professionally managed venture capital firms generally are private partnerships or closely-held corporations funded by private and public pension funds, endowment funds, foundations, corporations, wealthy individuals, foreign investors, and the venture capitalists themselves.

Venture capital is long-term risk capital to finance high technology projects which involve risk but at the same time has strong potential for growth. Venture capitalist pools their resources including managerial abilities to assist new entrepreneur in the early years of the project. Once the project reaches the stage of profitability, they sell their equity holdings at high premium.

VENTURE CAPITALISTS

A venture capitalist (VC) is a person who makes such investments, these include wealthy investors, investment banks, other financial institutions other partnerships.

Definition of Venture capital Venture capital is the investment of long term equity finance where the venture capitalist earns his return primarily in the form of capital gain

2.2 The Origin of Venture Capital

The origin of venture capital can be traced to USA in 19th century. After the second world war in 1946. the American Research and Development was formed as first venture organization which financed over 900 companies. Venture capital had been a major contributor in development of the advanced countries like UK, Japan and several European countries.

In USA, the venture capital funds got a boost after the creation of Small Business Investment Company under the Small Business Investment Act in 1958. Venture Capital funds are privately owned and constitute the largest source of equity capital. There are a number of venture capital firms in Greater Boston, San Francisco, New York, Chicago and Dallas. The electronic units in these areas got a start from these firms. The ventures financed were risky but carried more than proportionate promise of high return. The venture capital funds take a good deal of interest in the units financed by them and assist the companies with several financial, managerial and technical services.

The sources of venture capital in the USA are several. Individuals make venture capital investments directly or indirectly. In direct investment individual or partnership of the individuals appraises the proposal. In the indirect approach, venture capitalist appraises the proposal and presents his evaluation to the investors.

Actually venture capitalist developers venture situations in which to invest. For his trouble, venture capitalist receive 20 to 25 percent of the ultimate profits of the partnership know as carried interest. He also collects an annual fee of 2 percent (of capital lent or invested in equity) to cover costs. Apart from individuals, investors include institutions such as pension funds, life insurance companies and even universities. The institutional investors invest about 10 percent of their portfolio in the venture proposals. Specialist venture capital funds in U.S.A., have about $30 billions on an annual basis to seek-out promising start-ups and take in them. In Japan there are about 55 active venture firms with funds amounting to $ 7 billions (1993). Venture capital funds are also extant in U.K., France and Korea..2.3 STAGES OF Venture Capital financing

Venture capital can be provided to companies at different stages. These include:

I. Early- stage Financing Seed Financing: Seed financing is provided for product development & research and to build a management team that primarily develops the business plan.

Startup Financing: After initial product development and research is through, startup financing is provided to companies to organize their business, before the commercial launch of their products.

First Stage Financing: Is provided to those companies that have exhausted their initial capital and require funds to commence large-scale manufacturing and sales.

II. Expansion Financing Second Stage Financing: This type of financing is available to provide working capital for initial expansion of companies, that are experiencing growth in accounts receivable and inventories, and is on the path of profitability.

Mezzanine Financing: When sales volumes increase tremendously, the company, through mezzanine financing is provided with funds for further plant expansion, marketing, working capital or for development of an improved product.

Bridge Financing: Bridge financing is provided to companies that plan to go public within six to twelve months. Bridge financing is repaid from underwriting proceeds.

III. Acquisition FinancingAs the term denotes, this type of funding is provided to companies to acquire another company. This type of financing is also known as buyout financing. It is normally advisable to approach more than one venture capital firm simultaneously for funding, as there is a possibility of delay due to the various queries put by the VC. If the application for funding were finally rejected then approaching another VC at that point and going through the same process would cause delay. If more than one VC reviews the business plan this delay can be avoided, as the probability of acceptance will be much higher. The only problem with the above strategy is the processing fee required by a VC along with the business plan. If you were applying to more than one VC then there would be a cost escalation for processing the application. Hence a cost benefit analysis should be gone into before using the above strategy.Normally the review of the business plan would take a maximum of one month and disbursal for the funds to reach the entrepreneur it would take a minimum of 3 months to a maximum of 6 months. Once the initial screening and evaluation is over, it is advisable to have a person with finance background like a finance consultant to take care of details like negotiating the pricing and structuring of the deal. Of course alternatively one can involve a financial consultant right from the beginning particularly when the entrepreneur does not have a management background.

2.4 FEATURES OF VENTURE CAPITAL

1. Long-time horizon: In general, venture capital undertakings take a longer time say, 5-10 years at a minimum to come out commercially successful; one should, thus, be able to wait patiently for the outcome of the venture.

2. Lack of liquidity: Since the project is expected to run at start-up stage for several years, liquidity may be a greater problem.

3. High risk: The risk of the project is associated with management, product and operations .Unlike other projects, the ones that run under the venture finance may be subject to a higher degree of risk, as their result is uncertain or, at best, probable in nature.

4. High-tech: Venture capital finance caters largely to the needs of first generation entrepreneurs who are technocrats, with innovative technological business ideas that have not so far been tapped in the industrial field. However, a venture capitalist looks not only for high-technology but the innovativeness through which the project can succeed.

5. Equity participation and capital gains: A venture capitalist invests his money in terms of equity or quasi-equity. He does not look for any dividend or other benefits, but when the project commercially succeeds, then he can enjoy the capital gain which is his main benefit. Otherwise, he will be losing his entire investment.

6. Participation in management: Unlike the traditional financier or banker,the venture capitalist can provide managerial expertise to entrepreneurs besides money. Since many innovations and inventions cannot be commercialized due to lack of finance, venture capital finance acts as a strong impetus for entrepreneurs to develop products involving newer technologies and to commercialize them

2.5 FUNCTIONS OF VENTURE CAPITALIST

Venture capital is growingly becoming popular in different parts of the world because of the crucial role it plays in fostering industrial development by exploring vast and untapped potentialities and overcoming threats. Venture capitalist plays this role with the help of following major functions:

1. Venture capitalist provides finance as well as skills to new enterprises and new ventures of existing ones based on high technology innovations. It provides seed capital funds to finance innovations even in the pre-start stage. In the development stage that follows the conceptual stage venture capitalist develops a business plan (in partnership with the entrepreneur) which will detail the market opportunity, the product, the development and financial needs. In this crucial stage, the venture capitalist has to assess the intrinsic merits of the technological innovation, ensure that the innovation is directed at a clearly defined market opportunity and satisfied himself that the management team at the helm of affairs is competent enough to achieve the targets of the business plan. Therefore, venture capitalist helps the firm t move to the exploitation stage, i.e., launching of the innovation. While launching the innovation the venture capitalist will seek to establish a time frame for achieving the predetermined development marketing, sales and profit targets.

2. In each investment, as the venture capitalist assumes absolute risk, his role is not restricted to that of mere suppliers of funds but that of an active partner with total investment in the assisted projects. Thus, venture capitalist is expected to perform not only the role of a financier but also a skilled faceted intermediary supplying a broad spectrum of specialist services technical, commercial, managerial, financial and entrepreneurial.

3. Venture capitalist fills the gap in the owners funds in relation to the quantum of equity required to support the successful launching of a new business or the optimum scale of operations of an existing business. It acts as a trigger in launching new business and as a catalyst in stimulating existing firms to achieve optimum performance.

4. Venture capitalist job extends even as far as to see that the firm has proper and adequate commercial banking receivable financing.

5. Venture capitalist assists the entrepreneurs in locating, interviewing and employing outstanding corporate achievers to professionalism the firm.

2.6Venture Capital Investment Process

1. Deal origination

2. Screening

3. Due Diligence

4. Deal Structuring

5. Post Investment Activities

6. Exit

(1) Deal origination:In generating a deal flow, the VC investor creates a pipeline of deals or investment opportunities that he would consider for investing in. Deal may originate in various ways.referral system, active search system, and intermediaries. Referral system is an important source of deals. Deals may be referred to VCFs by their parent organizations, tradepartners, industry associations, friends etc. Another deal flow is active search through networks, trade fairs, conferences, seminars, foreign visits etc. Intermediaries is used by venture capitalists in developed countries like USA, is certain intermediaries who match VCFs and the potential entrepreneurs.

(2) Screening:VCFs, before going for an in-depth analysis, carry out initial screening of all projects on the basis of some broad criteria. For example, the screening process may limit projects to areas in which the venture capitalist is familiar in terms of technology, or product, ormarket scope. The size of investment, geographical location and stage of financing could also be used as the broad screening criteria.

(3) Due Diligence:Due diligence is the industry jargon for all the activities that are associated with evaluating an investment proposal. The venture capitalists evaluate the quality ofentrepreneur before appraising the characteristics of the product, market or technology. Most venture capitalists ask for a business plan to make an assessment of the possible riskand return on the venture. Business plan contains detailed information about the proposed venture. The evaluation of ventures by VCFs in India includes; Preliminary evaluation: The applicant required to provide a brief profile of the proposed venture to establish prima facie eligibility. Detailed evaluation: Once the preliminary evaluation is over, the proposal is evaluated in greater detail. VCFs in India expect the entrepreneur to have:- Integrity, long-term vision, urge to grow, managerial skills, commercial orientation. VCF in India also make the risk analysis of the proposed projects which includes :Product risk, Market risk, Technological risk and Entrepreneurial risk. The final decision is taken in terms of the expected risk-return trade-off as shown in

(4) Deal Structuring:In this process, the venture capitalist and the venture company negotiate the terms of the deals, that is, the amount, form and price of the investment. This process is termed as deal structuring. The agreement also include the venture capitalist's right to control the venture company and to change its management if needed, buyback arrangements, acquisition, making initial public offerings (IPOs), etc. Earned out arrangements specify the entrepreneur's equity share and the objectives to be achieved.

(5) Post Investment Activities:Once the deal has been structured and agreement finalised, the venture capitalist generally assumes the role of a partner and collaborator. He also gets involved in shaping of the direction of the venture. The degree of the venture capitalist's involvement depends on hispolicy. It may not, however, be desirable for a venture capitalist to get involved in the day-to-day operation of the venture. If a financial or managerial crisis occurs, the venture capitalist may intervene, and even install a new management team.

(6) Exit:Venture capitalists generally want to cash-out their gains in five to ten years after the initial investment. They play a positive role in directing the company towards particularexit routes. A venture may exit in one of the following ways: There are four ways for a venture capitalist to exit its investment:

1. Initial Public Offer (IPO)1. Acquisition by another company1. Re-purchase of venture capitalists share by the investee company1. Purchase of venture capitalists share by a promote.

2.7 Geographical Differences

Venture capital, as an industry, originated in the United States and American firms have traditionally been the largest participants in venture deals and the bulk of venture capital has been deployed in American companies. However, increasingly, non-US venture investment is growing and the number and size of non-US venture capitalists have been expanding.

Venture capital has been used as a tool for economic development in a variety of developing regions. In many of these regions, with less developed financial sectors, venture capital plays a role in facilitating access to finance for small and medium enterprises (SMEs), which in most cases would not qualify for receiving bank loans.

United StatesVenture capitalists invested some $6.6 billion in 797 deals in U.S. during the third quarter of 2006, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association based on data by Thomson Financial.

A recent National Venture Capital Association survey found that majority (69%) of venture capitalists predict that venture investments in U.S. will level between $20-29 billion in 2007.

CanadaCanadian technology companies have attracted interest from the global venture capital community as a result, in part, of generous tax incentive through the Scientific Research and Experimental Development (SR&ED) investment tax credit program. The basic incentive available to any Canadian corporation performing R&D is a non-refundable tax credit that is equal to 20% of "qualifying" R&D expenditures (labour, material, R&D contracts, and R&D equipment). An enhanced 35% refundable tax credit of available to certain (i.e. small) Canadian-controlled private corporations (CCPCs). Because the CCPC rules require a minimum of 50% Canadian ownership in the company performing R&D, foreign investors who would like to benefit from the larger 35% tax credit must accept minority position in the company - which might not be desirable. The SR&ED program does not restrict the export of any technology or intellectual property that may have been developed with the benefit of SR&ED tax incentives.Canada also has a fairly unique form of venture capital generation in its Labour Sponsored Venture Capital Corporations (LSVCC). These funds, also known as Retail Venture Capital or Labour Sponsored Investment Funds (LSIF), are generally sponsored by labor unions and offer tax breaks from government to encourage retail investors to purchase the funds. Generally, these Retail Venture Capital funds only invest in companies where the majority of employees are in Canada. However, innovative structures have been developed to permit LSVCCs to direct in Canadian subsidiaries of corporations incorporated in jurisdictions outside of Canada.

EuropeEurope has a large and growing number of active venture firms. Capital raised in the region in 2005, including buy-out funds, exceeded 60mn, of which 12.6mn was specifically for venture investment. The European Venture Capital Association includes a list of active firms and other statistics. In 2006 the top three countries receiving the most venture capital investments were the United Kingdom (515 minority stakes sold for 1.78bn), France (195 deals worth 875m), and Germany (207 deals worth 428m) according to data gathered by Library House.European venture capital investment in the second quarter of 2007 rose 5% to 1.14 billion Euros from the first quarter. However, due to bigger sized deals in early stage investments, the number of deals was down 20% to 213. The second quarter venture capital investment results were significant in terms of early-round investment, where as much as 600 million Euros (about 42.8% of the total capital) were invested in 126 early round deals (which comprised more than half of the total number of deals).

IndiaThe investment of capitalists in Indian industries in the first half of 2006 is $3 billion and is expected to reach $6.5 billion at the end of the year. Most VC firms in India are either divisions or subsidiaries of Silicon Valley funds. They are primarily centered in Bangalore and Mumbai. Some VCs also operate from Delhi and other parts of the National Capital Region.2.8 How does the VC industry work? Venture capital firms typically source the majority of their funding from large investment institutions such as fund of funds, financial institutions, endowments, pension funds and banks. These institutions typically invest in a venture capital fund for a period of up to ten years. To compensate for the long term commitment and lack of both security and liquidity, investment institutions expect to receive very high returns on their investment. Therefore venture capitalists invest in either companies with high growth potential where they are able to exit through either an IPO or a merger/acquisition. Although the venture capitalist may receive some return through dividends, their primary return on investment comes from capital gains when they eventually sell their shares in the company, typically between three to five years after the investment. Venture capitalists are therefore in the business of promoting growth in the companies they invest in and managing the associated risk to protect and enhance their investors' capital.

2.9 What does a Venture Capitalist look for ?

Venture capitalists are higher risk investors and, in accepting these higher risks, all they desire is a higher return on their investment. The venture capitalist manages the risk/reward ratio by only investing in businesses that fit their investment criteria.

Different Venture Capitalists have differing operating approaches. These differences may relate to the location of the business, the size of the investment, the stage of the company, industry specialization, and structure of the investment and involvement of the venture capitalists in the company's activities. The entrepreneur should not be discouraged if one venture capitalist does not wish to proceed with an investment in the company. The rejection may not be a reflection of the quality of the business, but rather a matter of the business not fitting with the venture capitalist's particular investment criteria.

Venture capital is not suitable for all businesses, as a venture capitalist typically seeks:

Superior BusinessesVenture capitalists look for companies with superior products or services targeted at large, fast growing or untapped markets with a defensible strategic position such as intellectual property or patents.

Quality and Depth of Management Venture capitalists must be confident that the firm has the quality and depth in the management team to achieve its aspirations. Venture capitalists seldom seek managerial control, rather they want to add value to the investment where they have particular skills including fund raising, mergers and acquisitions, international marketing, product development, and networks.

Corporate Governance and StructureVenture capitalists are put off by complex corporate structures without a clear ownership and where personal and business assets are merged.

Appropriate Investment Structure As well as the requirement of being an attractive business opportunity, the venture capitalist will also seek to structure a deal to produce the anticipated financial returns to investors. This includes making an investment at a reasonable price per share (valuation).

An Exit Plan Lastly, venture capitalists look for the clear exit opportunity for their investment such as public listing or a third party acquisition of the investee company.Once a short list of appropriate venture capitalists has been selected, the entrepreneur can proceed to identify which investors match their funding requirements. At this point, the entrepreneur should contact the venture capital firm and identify an investment manager as an initial contact point. The venture capital firm will ask prospective investee companies for information concerning the product or service, the market analysis, how the company operates, the investment required and how it is to be used, financial projections, and importantly questions about the management team. In reality, all of the above questions should be answered in the Business Plan. Assuming the venture capitalist expresses interest in the investment opportunity, a good business plan is a pre-requisite.

2.10 Advantages Of Venture Capital

It injects long term equity finance which provides a solid capital base for future growth.

The venture capitalist is a business partner, sharing both the risks and rewards.

The venture capitalist also has a network of contacts in many areas that can add value to the company.

The venture capitalist may be capable of providing additional rounds of funding should it be required to finance growth.

Disadvantages OF Venture Capital

Your investor may insist on putting a representative on your board (or having power to do so if financial targets are not met). For VCs, this is usually a non-executive director who will only take an active part if things go wrong. A business angel will usually want to be on the board himself, and will play a more active part.

You are under greater scrutiny generally, particularly in relation to your compliance with your duties and responsibilities as a director, e.g.: to act in the company's best interests, and disclose personal interests in your company's affairs.

Your investor will expect regular information and consultation to check how things are progressing. For example, monthly management accounts and minutes of board meetings.

Chapter : 3Venture Capital In International Area

3.1 Present State of Venture Capital In International Area

The natural birth place of venture capital is in the U.S.A. The development of the venture capital industry there has taken place over quite a long period. Venture capital industry in its present form started in 1949 the year of the formation in Boston of the American Research and Development Corporation. The legislation used to spur venture capital was Small Business Investment Companies with tax advantage and government loan money. By 1962, there were 585 such companies with 205 millions in capital between them. However, these companies ran into difficulties due to lack of understanding of venture capital principles on the part of the management land their inexperience. In the appropriate government legislation also contributed to the failures.

Learning from the experience of 60s new venture capital companies were formed which were better structured and organized in 70s. These were the years when venture capitalist became more involved in development financing both for their portfolios and for new investment. The pool of capital employed which stood at Rs.2.5 billions in 1975 surged significantly to $ 7.6 billions by the end of 1982 due to the tax reduction in 1978. In 1988 there were 587 active capital firms, of which 200 formed the core of the industry. There were $24.1 billion in funds under the management. The buoyancy in American venture capital activity was due to abundant technological opportunities for the creation and commercialization of new goods and services, freedom of foreign investment in the U.S.A. large potential gains associated with equity and management participation in high technology ventures and tax relief.

The most important features of American venture capitalist is that they are totally involved with firms based on high technological innovation right from the stage of conception of business ideas to the final stage of their establishment. They provide, in addition to risk capital, managerial, commercial, technical, financial and entrepreneurial services so as to enable the firm to achieve optimum performance. They are almost a full-fledged partner in the business along with the entrepreneur, sharing the risk and added value created in the process.

In the U.K., venture capital activity flourished in the years, since 1980. There were only 10 companies in the market supplying venture capital. In 1987 Britain had 140 such companies with total investments of 800 million. The major factors contributing to this phenomenal growth in venture capital activity in Britain were strengthening of the enterprise culture,

Both these factors were the outcome of strong government support, the government loan guarantee scheme and business expansion scheme to render fiscal and financial incentives to venture capitalists.

The British venture capital funds have certain special characteristics. They have come into existence to fill a potential gap in the market unfilled by the banks or the various government schemes. That potential is for close involvement in the management of the Company being backed and in the panning and ownership of the company over a period of perhaps 5 to 7 years. Some venture capitalist provide funds even right from the research stage.

3.2 Venture Capital in Developing CountriesVenture capital as such as has not been a popular source of financing in developing countries. Only a few Asian countries made serious efforts to establish venture capital organization. These VC organizations were usually set up by development banks as subsidiaries or separately managed funds. Besides in some developing counties such as Philippines and Argentina, commercial banks constituted VCs organizations.

However, it is interesting to observe that private sector organizations did not take much interest in setting up venture capital firms until recently. In some countries, VC firm came into existing with the support of International Finance Corporation (IFC) since 1978. For example, IFC played crucial role in setting up SOFINNOVA in Spain, VIBES in Philippines, Brasilpai in Brazil, IPS in Kenya, KDIC in Korea and SEA VI in South East Africa.

In recent years few VC firms have come up in countries such as Korea, Taiwan and Malaysia on the initiative of some private sector institution. In Korea, for example, number of VC firms have been established with the help of Korea Technology Advancement Corporation (KTAC). KTAC is a venture Capital group set up in 1974 with the sole objective of investing in high tech business, especially by commercializing the R&D results from the Korean Advanced instituted for Services and Technology.

Foreign venture Capital firms have not been in existence in developing counties excepting Taiwan which has been able to attract foreign VC firms since the initiation of the venture capital in 1983.

Venture capital organizations in these countries have not been made much headway because of several factors. One such factor is dearth of funds available for funding high risk technology ventures. Another factor contributing to slow growth of VC firms is absence of entrepreneurial approach among development banks and commercial banks. These institutions have also been found lacking flexibility, drive and managerial skills needed for venture financing. Further, inefficient performance of the government, and sponsored VCFs have retarded the growth of venture capital companies. Absence of tax incentives is another crucial factor responsible for slow growth of the companies.

In a number of developing countries including India tax laws favour debt against equity. Finally, disinvestments factor has hindered the progress of VC firms in developing countries. Investors are attracted towards equity investment only they are assured of making capital games by disposing off equity shares. Unfortunately financial markets in most of the developing countries are not properly developed to provide scope for sales of shares as and when desired by their holders.

Chapter : 4Venture Capital In India

4.1 VENTURE CAPITAL IN INDIAVenture capital as a source of the launch capital either of the American type or the slightly variant (in scope) British type is, by and large, conspicuous by its absence in India. There are, of course, some institutional venture capital funds/ schemes in operation in India. For instance, Industrial Finance Corporation of India set up the Risk Capital Foundation in 1975 with a view to providing special assistance to new entrepreneurs, particularly technologists and professionals for promoting medium-sized industrial projects. Further, with a view to assisting entrepreneurs who have skills but lack finance to bring in the requisite promoters contribution, Industrial Development Bank of India (IDBI) introduced two seed capital schemes, viz.,

State financial corporations special share capital schemes under which SFCs extend special share capital assistance to projects in the small-scale sector from their special class of share capital contributed jointly by the concerned state Government and IDBI.

IDBIs own scheme for such assistance (operated mainly through State Industrial Development Corporation / State Financial corporation)_ in respect of medium-sized projects costing upto Rs.2 crores. In 1985 the IDBI introduced venture capital fund scheme to assist industrys efforts for technological advancements. Most of the ventures assisted by the Bank have been sponsored by professionally qualified entrepreneurs and the process/technology involved a wide range of new and indigenously developed ones.

In 1986, Industrial Credit and Investment Corporation of India (ICICI) also launched a venture capital scheme to encourage new techno crafts in the private sector in new fields of high technology with inherent risk. Under this scheme ICICI assists projects, with initial investment not exceeding Rs.2 crores, in the form of equity or conditional loan with flexible charges and repayment period or conventional loan. Two new fund were launched recently.

The first one called India fund floated by the International Division of Merrill Lynch with subscription by non-resident Indians living mainly in the UK and Western Europe is managed by the UTI.

The second one is the venture capital fund with an initial capital of Rs.10 crores established in December 1986 by IDBI to provide equity capital for pilot plants attempting commercial applications of indigenous technology and to adapt previously imported technology to wider domestic application.

To undertake the task on a continuous and systematic basis, the Industrial Credit and Investment Corporation set up with the UTI The Technology Development and Information Company of India Ltd. (TDICI) in 1989. TDICT has started providing venture capital, R & D funds and technical and managerial services including Technology and Information. The ICICI also established in 1988 with UTI venture capital fund with Rs.20 crores, subscribed equally by ICICI and UTI. The fund is being used for providing assistance mainly in the form of equity, conditional loans and convertible debenture, to set up technological ventures which have potential for fast growth.

In January, 1990 ICICI and UTI have jointly launched their second venture fund for Rs.100 crores. It is interesting to note that the commonwealth Development Corporation of the U.K. will also be participating in this fund. Among commercial banks, State Bank of India, Canara Bank and Grind lays Bank have shown interest in this area. SBIs merchant banking subsidiary, SBI capital markets invests in the equity shares of new and unknown companies. Canara Bank has also set up a venture capital fund through its subsidiary, viz., (as bank financial Services) Grind lays Bank launched India investment fund to provide venture capital assistance to high risk projects.

In July, 1990 The Gujarat Industrial Corporation Ltd., launched a venture capital finance scheme through a newly registered subsidiary with the help of the Capital Trust Fund worth Rs.24 crores to cater to projects which will enhance the growth of the national economy. The new subsidiary Gujarat Venture Finance Ltd. would financially support the entrepreneur having both indigenous and imported technologies not tried before in the country. This organization would finance venture capital entirely through equity participation.

In private sector a few venture capital funds have been established. One such fund is Indus Venture Capital Fund (IVCF). This venture capital has been set up with a capital of Rs. 21 crore contributed by several Indian and international institutions. The fund provides both equity capital as well as managerial support to entrepreneurs.

The other private venture capital firms set up in India are Credit Capital Venture Fund, Twentieth Century Finance Company and Infrastructure Leasing and Financial Services Ltd.

The above venture capital funds / schemes are essential in the nature of equity assistance funds/schemes. There are no full- fledged individual corporate or institutional venture capitalist in India offering a broad spectrum of multi-faced specialist services like the venture capitalist in the U.S. or U.K. Further, having regards to the mammoth task to be performed by venture capital finance in India, the size of the fund would appear to be too small. The venture capital investment in India till the year 2001 was continuously increased and thereby drastically reduced. Following Chart shows that there was a tremendous growth by almost 327 percent in 1998-99, 132 percent in 1999-00, and 40 percent in 2000-01 there after venture capital investors slow down their investment. Surprisingly, there was a negative growth of 4 percent in 2001-02 it was continued and a 54 percent drastic reduction was recorded in the year 2002-2003.

4.2 INITIATIVE IN INDIA

Indian tradition for VC for industry goes back more than 150 years when many of the managing agency houses acted as venture capitalist providing both finance and management skill to risky projects. It was the managing agency system through which Tata Iron and Steels and era press mills were able to raise equity capital from the investing public. The Tata also initiated a managing agency house, named Investment Corporation of India in 1937 which by acting as venture capitalist, successfully promoted bi-tech enterprises such as enterprises such as CEAT Tyres. Associated Bearings National Rayon' the early form of venture capital enables the entrepreneurs to raise large amount of funds and yet retain management control. After the mobilizing of managing agency system, the public sector term lending institutions s meet a part of venture capital requirements through seed capital and risk capital for hi-tech industries which were not able to meet promoters contribution. However all these institutions supported only proven and sound technology while technology development remanded largely confirmed to government labs and academic institutions . Many hi-tech industries, thus found it impossible to obtain financial assistance from banks and other financial institutions due to unproven technology conservative attitude, risk awareness and rigid security parameters.

Venture capital's growth in India passed through various stages. In 2973m R.S. Bhatt Committee recommended formation of Rs. 100 crore venture capital fund, the Seventh Five Year Plan emphasis need for developing a system of funding venture capita. The Research and Development Cess Act was enacted in May 1986 which introduced a cess of 5% on all payments made for purchase of technology from abroad. The levy provided the source for the venture capital fund.

United Nations development Programme in 1987 on behalf of Government examined the possibility of developing venture capital in private sector. Technology Policy Implementation Committee in the same year also recommended the same provisions. Formalised venture capita book roots when venture capital guidelines were by Comptroller of Capital Issues in November.

4.3 Methods of Venture Financing In India

Venture capital is available in three forms in India 1. Equity Participation.2. Conventional Loan.3. Conditional Loan.

1. Equity Participation: Venture Capital firms participate in equity through direct purchase of shares but their stake does not exceed 49% .These shares are retained by them till the assisted projects making profit. These shares are sole either to the promoter at negotiated price under by back agreement or the public in the secondary market at a profit.

2. Conventional Loan: Under this form of assistance, a lower fixed rate of interest is charged till the assisted units become commercially operational, after which the loan carries normal or higher rate of interest. The loan has to be repaid according to a predetermined schedule of repayment as per terms of loan agreement.

3. Conditional Loan : Under this form of finance, an interest free loan is provided during the implementation period but it has to pay royalty on sales. The loan has to be repaid according to the a pre determined schedule as soon as the company is able to generate sales and income.

4.4 Regulatory Framework for VC in India

The following are the guidelines issued by the Government of India.

1. The public sector financial institutions, State Bank of India, scheduled banks, foreign banks and their subsidiaries are eligible for setting the venture capital funds with a minimum size of Rs.10 crore and a debt equity ratio of 1:15 they desire to raise funds from the public, promoters will be required to contribute a minimum of 40 percent of capital. Foreign equity upto 25 percent subject to certain conditions would be permitted.

The guideline provided for Non-Resident Indians investment upto 74 percent on a reportorial basis and 25 percent to 40 percent on non repatriable basis. It should invest 60 percent of its funds in venture capital activity. The balance amount can be invested in new issue of any existing or new company in equity, cumulative convertible performance shares, debenture bonds or any other security approved by controller of Capital issues.

2. The venture capital companies and venture capital funds can be set up as joint venture between stipulated agencies and non institutional promoters but the equity holding of such programmes should not exceed 20 percent and should not be largest single holder.

3. The venture capital assistance should go to enterprises with a total investment of not more than Rs. 10 crore.

4. The venture capital company (VCC) /Venture Capital Fund (VCF) should be managed by professionals and should be independent of the parent organization.

5. The VCC/VCF will not be allowed to undertake activities such trading, brooking money market, bills discounting, inter corporate lending. They will be allowed to invest in leasing to the extent 15 percent of the total funds development. The investment on revival of risk units will be treated as a part of venture capital activity.

6. Listing of VCCs/VCF can be according to the prescribed norms and underwriting of issues at the promoter's discretion.

7. A person holding a position of full time chairman/president, chief executive, managing director or executive director/whole time director in a company will not be allowed to hold the same position simultaneously in the VCC/VCF.

8. The venture Capital assistance should be extended to

The enterprise having investment upto Rs. 10 crores in the project. The technology involved should be new and untried or it should incorporate significant improvement over the existing technology in India., The promoters should be new, professional or technically qualified with inadequate resources. The enterprise should be established in the company form employing professionally qualified person for maintenance accounts.

9. Share practicing at the time of disinvestments by a public issue or general sale offer by the company or fund may be done subject to this being calculated an objective criteria and the basis disclosed adequately to the public.

4.5 SEBI Regulations (Venture Capital Funds) (Amendment), 2000. Following are the salient features of SEBI (Venture Capital Funds) (Amendment) Regulations, 2000 :

1.1 Definition of Venture Capital Fund : The Venture Capital Fund is now defined as a fund established in the form of a Trust, a company including a body corporate and registered with SEBI which: A. has a dedicated pool of capital; B. raised in the manner specified under the Regulations; and C. to invest in Venture Capital Undertakings in accordance with the Regulations." 1.2 Definition of Venture Capital Undertaking: Venture Capital Undertaking means a domestic company :- a. Whose shares are not listed on a recognised stock exchange in India b. Which is engaged in business including providing services, production or manufacture of articles or things, or does not include such activities or sectors which are specified in the negative list by the Board with the approval of the Central Government by notification in the Official Gazette in this behalf. The negative list includes real estate, non-banking financial services, gold financing, activities not permitted under the Industrial Policy of the Government of India. 1.3 Minimum contribution and fund size : The minimum investment in a Venture Capital Fund from any investor will not be less than Rs. 5 lacs and the minimum corpus of the fund before the fund can start activities shall be atleast Rs. 5 crores.

1.4 Investment Criteria : The earlier investment criteria has been substituted by a new investment criteria which has the following requirements : Disclosure of investment strategy; Maximum investment in single venture capital undertaking not to exceed 25% of the corpus of the fund; Investment in the associated companies not permitted; Atleast 75% of the investible funds to be invested in unlisted equity shares or equity linked instruments. Not more than 25% of the investible funds may be invested by way of: a. subscription to initial public offer of a venture capital undertaking whose shares are proposed to be listed subject to lock-in period of one year; b. debt or debt instrument of a venture capital undertaking in which the venture capital fund has already made an investment by way of equity. It has also been provided that Venture Capital Fund seeking to avail benefit under the relevant provisions of the Income Tax Act will be required to divest from the investment within a period of one year from the listing of the Venture Capital Undertaking.

1.5 Disclosure and Information to Investors: In order to simplify and expedite the process of fund raising, the requirement of filing the Placement memorandum with SEBI is dispensed with and instead the fund will be required to submit a copy of Placement Memorandum/ copy of contribution agreement entered with the investors along with the details of the fund raised for information to SEBI. Further, the contents of the Placement Memorandum are strengthened to provide adequate disclosure and information to investors. SEBI will also prescribe suitable reporting requirement from the fund on their investment activity.

2. QIB status for Venture Capital Funds : The venture capital funds will be eligible to participate in the IPO through book building route as Qualified Institutional Buyer subject to compliance with the SEBI (Venture Capital Fund) Regulations. 3. Relaxation in Takeover Code: The acquisition of shares by the company or any of the promoters from the Venture Capital Fund under the terms of agreement shall be treated on the same footing as that of acquisition of shares by promoters/companies from the state level financial institutions and shall be exempt from making an open offer to other shareholders. 4. Investments by Mutual Funds in Venture Capital Funds: In order to increase the resources for domestic venture capital funds, mutual funds are permitted to invest upto 5% of its corpus in the case of open ended schemes and upto 10% of its corpus in the case of close ended schemes. Apart from raising the resources for Venture Capital Funds this would provide an opportunity to small investors to participate in Venture Capital activities through mutual funds. 5. Government of India Guidelines: The Government of India (MOF) Guidelines for Overseas Venture Capital Investment in India dated September 20, 1995 will be repealed by the MOF on notification of SEBI Venture Capital Fund Regulations.

4.6 Venture Capital Industry Wise Segmentation

4.7 Future Prospects Of Venture Capital

VC helps in the rehabilitation of sick units.

VC can assist small ancillary unit to upgrade their technologies.

VC plays a significant role in developing countries in the service sector including tourism, publishing health care etc.

They can provide financial assistance to coming out of Universities, Technical institutes, thus promoting entrepreneurial spirits.

4.8 Prerequisites To Success Of VC In India

The success of venture capital in India requires the following;

1. An entrepreneurial tradition must be more broad based and less family based.

2. Attractive customer opportunities of high-technology type should be created.

3. Tax policies need to be carefully scrutinized to eliminate those provisions which work heavily against the emergence of risk capital.

4. These has to be some institutional changes which offer the venture capitalist the opportunity to off load the investment.

5. Disinvestments avenue have to be positively encouraged and in this both the government and the securities markets have to play a positive role.

6. The association of venture capital with high technological and investment opportunities must be declined.

There is need for venture capital for development of many products and services which are relevant to our country and which can be produced with less domestic technological innovation and smaller domestic markets.

Chapter : 5Research Methodology

5.1 Research Methodology

REDMEN & MORY defines, Research as a systematized effort to gain now knowledge.

It is a careful investigation for search of new facts in any branch of knowledge. The purpose of research methodology section is to describe the procedure for conduction the study. It includes research design, sample size, data collection and procedure of analysis of research instrument.

Research always starts with a question or a problem. Its purpose is to find answers to questions through the application of the scientific method. It is a systematic andIntensive study directed towards a more complete knowledge of the subject studied.

RESEARCH DESIGN :

Acc. to Kerlinger, Research design is the plan structure & strategy of investigation conceived so as to obtain answers to research questions and to control variance.

Acc. to Green and Tull, A research design is the specification of methods and procedures for acquiring the information needed. It is the overall operational pattern or framework of the project that stipulates what information is to be collected from which sources by what procedures.

Its found that research design is purely and simply the framework for a study thatguides the collection and analysis of required data.

Research design is broadly classified into Exploratory research design Descriptive research design Casual research design

This research is a Exploratory research . The major purpose of this research isdescription of state of affairs as it exists at present.

5.2 DATA COLLECTION

Primary data : To collect primary data from investors Questionnaires were used. Questionnaire was prepared very carefully so that it may prove to be effective in collecting the right information which fulfills my study

Tools for collecting primary data:

(A) QUESTIONNAIRE METHOD The major motive of taking this method was that it covers large population at a time. One can have direct contact with the respondents. The questionnaire was distributed to the customers taking sample size 50.

Secondary data

Secondary data is the data which is already collected by someone and complied for different purposes which are used in research for this study. It includes:-

Internet

Magazine

Newspaper

METHOD OF DATA COLLECTION:Information was collected by personally contacting customers through interviews.

5.3 Sample design:

The way of selecting a sample is popularly known as sample design is a definite plan determined before any are actually collected for obtaining a sample from a given population. A brief mention of the important sample design is as follows.

1. Deliberate sampling:

Deliberate sampling is also known as purposive or non-probability sampling. This sampling method involves deliberate selection of particular units of the universe for constituting a sample which represent universe.

1. Simple random sampling:This type of sampling is also known as chance sampling or probability sampling where each and every item in the population has an equal chance of inclusion in the sample and each one of the possible samples, in case of finite universe, has the same probability of being selected.

1. Systematic sampling:In some instance the most practical way of sampling is to every 15th name on a list, every 10th house on one side of a street and so on.

1. Stratified sampling:

In this technique, the population is stratified into number of non-overpopulation sub population or strata and sample item are selected from each stratum.

1. Cluster sampling:Cluster sampling involves grouping the population and then selecting the group of cluster rather than individual elements for inclusion in the sample.

Chapter : 6Data Analysis and Interpretation

Q1 Are you aware about venture capital?

ParticularsNo. Of RespondentsPercentage

Yes3570%

No1530%

70% of the respondent said yes, 20% said no .

(Q2) Have you ever invested in any venture capital company?

ParticularsNo. Of RespondentsPercentage

Yes3060%

NO2040%

60% of the people have invested in the venture capital

(Q3) Which company of venture capital would you prefer ?

ParticularsNo. Of RespondentsPercentage

Indian4590%

Foreign510%

90 % People prefer Indian company over foreign company.

(Q4) If yes, how did you know about Venture capital?

ParticularsNo. Of RespondentsPercentage

Advertisement1530%

Peer group510%

Banks 1020%

Financial advisors2040%

(Q5) According to you, venture capital is profitable or not ?

ParticularsNo. Of RespondentsPercentage

Yes3060%

No2040%

(Q6) Do you think the procedure of venture capital is?

ParticularsNo. Of RespondentsPercentage

Lengthy2040%

Convenient3060%

(Q7) Do you think after the establishment of venture capital in India, there is growth in entrepreneurship?

ParticularsNo. Of RespondentsPercentage

Yes3060%

No2040%

Chapter : 7SWOT Analysis Of Venture Capital In India

7.1 SWOT ANALYSIS OF INDIAN VENTURE CAPITAL

STRENGTHS Increased awareness of venture capital Growing number of foreign trained professionals. Global competition growing. Matured towards market system Electronic trading through NSE & BSE. Irreversible reform Regulatory framework evolving

WEAKNESS Limited exit option Uncertainties Policy repatriation, taxation Smaller funds with illiquid investments Domestic fund raising difficult Lack of transparency & corporate governance Poor legal administration

OPPORTUNITIES

Growth capital for strong companies and Buyouts of weak companies due to growing global competition Financial restructuring have over leveraged companies taking place. Acquisition of quoted small/ medium cap companies. Pre money valuations low

THREATS

Change in government policies with respect to 1. Structuring2. Taxation Threats from within Explosive expansion and over Exuberance of investor.

Chapter : 8 Finding Suggestions,Conclusion

8.1Findings

During the preparation of my report I have analyzed many things which are following:-

1. A number of people in India feel that financial institution are not only conservatives but they also have a bias for foreign technology & they do not Trust on the abilities of entrepreneurs.

2. Venture Capital Financing is still not regarded as commercial activity.

3. Ambiguous government policy towards inter-corporate investment and issue of shares to the entrepreneurs at below per value or in the form of a guest equity.

4. It was fond that most of the respondent are aware about venture capital

5. Most of the respondent have invested in venture capital

6. Almost all of them prefer to invest in Indian venture capital and only few of them prefer to invest in foreign venture capital

7. According to those 30 investors venture capital is a profitable mode of making money.

8.2Suggestions

1. There should be a greater role for the venture capitalists in the promotion of entrepreneurship, the Venture capitalists should promote entrepreneur forums, clubs and institutions of learning to enhance the quality of entrepreneurship.

2. The government allow or encourage pension fund and insurance company to make investment in the venture capital.

3. The entry of private sector should be encourage.

4. Tax concession and exemption should be given to the investor

8.3 ConclusionVenture capital can play a more innovation and development role in a developing country like India. It could help the rehabilitation of sick unit through people with ideas and turnaround management skill. A large number of small enterprises in India because sick unit even before the commencement of production of production. Venture capitalist could also be in line with the developments taking place in their parent companies.

ANNEXURE

PART A

(1) Name: Mrs/Ms/Mr _______________________________________

(2) Age(a) Between 20 30 years(b) Between 30 40 years(c) Between 40 50 Years(d) More than 50 years

(3) Contact No: _______________________________

Part B(4) Qualification

a) Graduationb) Under Graduatec) Others

(5) Occupation

a) Business

b) Govt. sec

c) Other

(6) Are you aware about venture capital?a) Yes b) No

(7) Have you ever invested in any venture capital company?a) Yesb) No

(8) Which company of venture capital would you prefer?a) Indian b) Foreign

(9) If yes, how did you know about Venture capital?a) Advertisementb) Peer Group c) Banksd) Financial Advisors

(10)According to you, venture capital is profitable or not?a) Yes b) No

(11) Do you think the procedure of venture capital is?a) Convenientb) Lengthy

(12) Do you think after the establishment of venture capital in India, there is growth in entrepreneurship?a) YES b) No

Bibliography

Books:-

Financial Services - MC Graw - Hill Publishing Ltd. - 3rd Edition By M.Y. Khan

I M Pandey Venture Capital Development Process in India, Technovation,Vol.18, 1998

Merchant Banking - Principle and Practice - 3rd Edition By H.R. Machhiraju.

Websites:-

http://www.indiavca.org http://economyreview.blogspot.com www.sebi.gov.in http://www.businessgyan.com www.venture-capital.co.in/ http://www.managementparadise.com http://www.reedexpo-venturecapital.com http://www.nexusindiacap.com

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