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FINANCIAL SERVICE SECTOR

Fueling Indias DevelopmentEmphasizing on :VENTURE CAPITAL: Better TomorrowVENTURE CAPITAL?

S.NOPARAMETERVENTURE CAPITALISTCONVENTIONAL FINANCIER1.Form of FinanceEquity/Quasi equity, bridge financeTerm loan (SECURITY BACKED)2.Management ApproachActive participation(Make efforts in the direction of maximization of shareholders wealthPassive participation(Make efforts to keep its own money safe & secure)3.Return ExpectationPayments related to performance/Capital appreciation , royalty on salesFixed Obligation(Interest Rate) 4.Risk TakingRisk taker , willing to accept high risk only for potential high returnRisk averser5.ProjectsPreference for small start-ups, innovative producers & markets, and non tangible asset basePreference for successful business generally tangible asset basedNO.OF INVESTORS WHO HAVE actually made investment IN DIFFERENT STAGEINVESTMENT STAGENO.OF INVESTORSINVESTOR BY FUND ORIGINTOTAL FUND FOCUSDOMESTICFOREIGNEarly71304136Growth57203634Late

42152723Other9542Buy out4221Pre-Ipo----PIPE----TOTAL114447069VC INVESTMENT PROCESSReceipt of Business Plan/PresentationFirst Meeting with Company/FoundersTerm Sheet SubmissionSignature of Final documentsMoney TransferVarious Exit Plans

EXIT ROUTE

GAP ANALYSISDROP18%

Saraf Foods Ltd

Established on: 1991Promoters: Promoted by Mr. Suresh Saraf, a mechanical engineer and a first generation entrepreneur.Business: The company processes vacuum freeze-dried fruits and vegetables, using indigenous equipment. Venture capitalist: GVFL-Gujarat Venture Finance Ltd.

Case study

First company in India to process vacuum freeze dried fruits and vegetables using indigenous equipment.

An innovative idea that had potential as it involved a new technology, used indigenously sourced raw materials, and export oriented.

Achievement12

Involvement of professionals from the Bio-medical group of the BARC to help introduce this new technology in India.

Negotiated with suppliers of plant & machinery on behalf of the company

GVFL helped by networking with Central Food and Technological Research Institute (CFTRI) for preparing samples of the products

GVFL encouraged corporate governance practices and streamlining of systems and processes.

Role of GVFL in growth of Saraf foodsRevival after initial set backs

Tiding over severe onion crisis in1998 & the subsequent ban on onion export.

Achieved full capacity utilization in 2001 in 2002 the company started using un utilized capacity of another unit. The company achieved a turn over of Rs 3.41 crores in 2002-2003, with a profit of Rs 33.19 lakhs.Path of SuccessThe company turned around even after major setbacks due to consistent support by GVFL. A partial exit has been made from the company by way of promoter buy back.

Its presence in both indian & global market.

Saraf spells its his success as combination of 'consistency, hard work and determination.Current StatusCONCLUSIONVenture Capital is the outright solution for any country and means of finance in turning the creative ideas and abilities of the entrepreneurs into very fruitful and viable commercials aspects.

It still is in the nascent stage in India because of its risk perception.

Creating awareness on venture capital would open the doors wide.

More young talents would make this possible.

Presentation by:Amrin Taj . K (B.Com Honours) Ramya . S (B.Com Honours)

S.D.N.B.Vaishnav College For Women