DISSERTATION REPORT

ON

“ANALYSIS OF VENTURE CAPITAL IN INDIA”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT

FOR THE AWARD OF THE DEGREE OF

Master of Business Administration

Submitted by:

Shagufi
Enroll. No.: 2017-502-084
MBA (GENERAL) 2017-2019

Under the guidance of:

Mr.Kapil Matta
(Assistant Professor)
SCHOOL OF MANAGEMENT & BUSINESS STUDIES
JAMIA HAMDARD, HAMDARD NAGAR, NEW DELHI

1
 DEPARTMENT OF MANAGEMENT
JAMIA HAMDARD
HAMDARD NAGAR, NEW DELHI-110062

CERTIFICATE

This is to certify that this dissertation report titled “ANALYSIS OF VENTURE CAPITAL IN
INDIA” is the bonafide work done by Ms.SHAGUFI, Enroll. No: 2017-502-084, under my
guidance and supervision. Certified further that to the best of my knowledge, the work reported
herein does not form part of any other project report on the basis of which a degree or award was
conferred on an earlier occasion on this or any other candidate.

Mr.Kapil Matta
(Supervisor)

2
 DECLARATION

This to certify that I have completed the project titled “A STUDY ON VENTURE CAPITAL
IN INDIA” under the guidance of “MR. KAPIL MATTA” in the partial fulfillment of the
requirement for the award of the degree of “Master in Business Administration” from “JAMIA
HAMDARD, New Delhi.” This is an original work and I have not submitted it earlier elsewhere.

Name: SHAGUFI
Enrollment No: 2017-502-084

3
 ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to JAMIA HAMDARD, New Delhi for imparting
me valuable progress in MBA.

I pay my gratitude and sincere regards to “MR. KAPIL MATTA”my project Guide for giving
me the cream of his knowledge. I am thankful to him as he has been a constant source of advice,
motivation and inspiration. I am also thankful to him for giving his suggestions and
encouragement throughout the report work.

I take the opportunity to express my gratitude and thanks to our computer Lab staff and library
staff for providing me opportunity to utilize their resources for the completion of the project.

I am also thankful to my family friends and for constantly motivating me to complete the project
and providing me an environment which enhanced my knowledge.

SHAGUFI

4
 TABLE OF CONTENT

CHAPTER NO TOPIC PAGE NO.

01 INRODUCTION 6

02 LITERATURE REVIEW 20

03 RESEARCH METHODOLOGY 24

04 ANALYSIS AND 27
INTREPRETATION

05 CONCLUSION 38

06 BIBLIOGRAPHY 40

5
INTRODUCTION

6
 CHAPTER- 1

VENTURE CAPITAL

“Venture capital is a form of risk capital”

Venture capital provides long-term capital fund to the entrepreneur, or VC is the finance
provided by Venture Capitalists, who invest in comparatively new, high growth companies or
startups that have a likely to grow and develop into greatly profitable ventures. It has high-risk
and high-return characteristics. Thus, it acts as an essential source of finance for entrepreneurs
with new thoughts.

What is Venture capital?

Venture capital is the financing technology which provides long-term, share capital to help
companies to grow and succeed. If an entrepreneur wants for a fund, for start-up, expand, buy
into a business, and buy out a business.

It is a way in which investor support an entrepreneur skills, talent, to exploit business by

providing fund. It is a provision of risk bearing capital, it also help in, management advice, and
contributing overall strategy. It is the money invested in business that are small; or exist only as
an initial stage but have huge potential to grow up. The people who invest this money are known
as venture capitalists.

It is an investment made when a venture capitalist buys shares of a startup company and become
a financial partner in the business.

Venture Capital is also stated as a huge capital risk or patient risk capital investment, as it
involves the risk of losing the capital if the venture doesn’t do well.

It is the basically the money invested by an outsider investor to finance a new, growing or sick
companies. The money invested, by capitalists, is in exchange for an equity stake in the business
rather than given as a loan.

7
IMPORTANCE OF VENTURE CAPITAL

 It helps new products with modern technology become commercially feasible.

 It promotes export oriented units to earn more foreign exchange.
 It not only provides the financial institution but also assist in management, technical and
others.
 It strengthens the capital market which not only improves the borrowing concern but also
creates a situation whereby they can raise their own capital through capital market.
 It promotes modern technology through the process where financial institutions
encourage business ventures with new technology.
 Many sick companies get a turn around after getting proper nursing from such Venture
Capital institutions.

INVESTMENT IN INDIA BY VENTURE CAPITALIST

1. IT and IT enabled services

2. Software products
3. Wireless/Telecom/Semiconductor
4. Banking

8
 5. Modern/Entertainment
6. Bio Technology
7. Pharmaceuticals
8. Electronic Manufacturing
9. Retail

FEATURES OF VENTURE CAPITALS

High-risk investment: It is very risky and the possibilities of failure are much higher as it
provides long-term startup funds to high risk-high return ventures.

High Tech projects: Generally, venture capital investments are made in high tech projects or
areas using new technologies as they have higher returns.

Participation in Management: Venture Capitalists act complementary to the entrepreneurs, for

better or worse, in making decisions for the direction of the company.

Length of Investment: The investors eventually seek to exit in 3 to 7 years. The process takes
several years for having significant returns and also need the talent of venture capitalist and
entrepreneurs to reach completion.

Illiquid Investment: It is an investment that is not subject to repayment on demand or a

repayment schedule.

9
PROCESS OF VENTURE CAPITAL

Deal Origination

It is the first step in venture capital financing. It is not possible to make an investment without a
deal therefore a stream of deal is necessary however; the source of origination of such deals may
be various.

Screening

It is the process by which the venture capitalist scrutinizes all the projects in which he could
invest. The projects are classified under different criterion such as market scope, technology or
product, size of investment, geographical location, stage of financing etc. for this process of
screening the entrepreneurs are asked to provide a short profile of their venture or to invite for
face-to-face discussion for seeking certain clarifications.

10
Evaluation

After the screening, the next step is to evaluate a detailed study is done. Some of the documents
that are studied in details are projected profile, record of accomplishment of the entrepreneur,
future turnover, etc. The process of evaluation is not only evaluates the project capacity but also
evaluates capacity of the entrepreneurs to meet such claims. Certain qualities in the entrepreneur
such as entrepreneurial skills, technical competence, manufacturing and marketing abilities and
experience are put into consideration during evaluation. After putting into consideration all the
factors, thorough risk management is done which is then followed by deal negotiation.

Deal Negotiation

Deal negotiation is a process by which the terms and conditions of the deal are conveyed so as to
make it mutually beneficial. Both the parties put forward their demands and a way in between is
sought to settle the demands. Some of the factors that are negotiated are amount of investment,
percentage of profit held by both the parties, rights of the venture capitalist etc.

Post Investment Activity

Once the deal is finalised, the venture capitalist becomes a part of the venture and takes up
certain rights and duties. The capitalist however does not take part in the day to day transaction
of the firm but it only involved during the condition of financial risk. The venture capitalists
participate in the enterprise by a representation in the Board of Directors and ensure that the
enterprise is acting as per the plan.

Exit

The last stage of venture capital investment is to make the exit plan based on the nature of
investment, and type of financial stake etc. The exit plan is made to make minimum losses and
maximum profits. The venture capitalist may exit through IPOs, acquisition by another company,
purchase of the venture capitalists share by the promoter or an outsider.

11
STAGES OF FINANCING

Seed Stage

In this stage, a small amount of money is provided to an entrepreneur to get a better idea for
future prospects. The investor investigates into the business plan before making any investment
and, if he is not satisfied with the idea or he does not see any potential growth in the business,
then the investor may not think about financing the plan. But in case if the part of the idea is
worth, then the investor may spend some time and money further on the idea. At this stage, the
risk factor is very high because there are many uncertain factors.

Startup Stage

If the plan is fit then further investigation will be done, then the process will moves on to the
second stage, also known as the Start-up stage. At this stage Venture Capital has to submit a
business plan which must contain the following:-

 Executive summary of the business plan,

 Review of current competitive scenario,
 In-detailed financial projections,
 Details of the management of the company,
 Description of the size and potential of the market.

All the above analysis needs to be done before deciding Venture Capital to take the project or
not. This type of financing is provided to complete product development and commence initial
market strategies.

Second Stage

At this stage, product is launchedin the market, but the business has not yet become profitable.
The aim at this stage is that ventures try to squeeze among the rests and getting some market
shares from the competitors. The management is being monitored by the investors in order to

12
know the capability of the team just to ensure the development process of the product and how
they respond to the competitors. If the firms find out that the capabilities are not in favor of the
competition. Then the Venture Capital will not go to the next stage.

At this stage Venture capital investor providelarger funds for the expansion of the business.

At this stage, risk factor minimizes as the product is not increasing at the former start-up stage.
But it concentrates on the advertising and sales of the product.

Mezzanine/Development Capital

At this stage business has overcome the risky stage and recorded a profit for a few years but is
yet to reach a stage when they can go publican raise fund from the market.The money is
generally used for machines, equipments, plant expansion, marketing distributing facilities,
penetration into new region.

This finance stage has a time period of 1 to 3 years and falls in medium category.

Bridge/Expansion

This finance by venture capital investor involves low risk perception and time frame of 1to 3
years. Venture capital undertaking such finance to expand business by way of growth of their
own productive assets or by acquisition of other firm assets.

Buyouts

In buyout ownership losses or transfer of management control. They fall under 2 categories.

MBO (Management buyout): VCIs provide funds to enable the existing working management to
acquire an existing product line or business. They represent an essential part of the activity of
VCIs.

13
MBI (Management buyin): The funds provided to enable an outside group of managers to buy
an ongoing company. They generally bring 3 elements together: a management team, a target
company and an investor (VCI)

Turnaround

It involves buying the power of a sick company. Two kinds of inputs are necessary in a
turnaround namely, money and management. The VCIs have to see good management and
operations leadership. Such form of venture capital financing involves medium to high risk and a
time frame of 1 to 5 years.

14
 HISTORY OF VENTURE CAPITAL

One of the 1st stage proceeding a professionally accomplished venture capital industry was the
route of the Small Business Investment Act of 1958. The 1958 Act publicly certified the US
Small Business Administration (SBA) to license private “Small Business Investment
Companies” (SBICs) to support the financing and management of the small entrepreneurial
business in the United States. It is usually noted that the 1st venture-backed startup is Fairchild
Semiconductor (which created the 1st commercially real integrated circuit), financed in 1959 by
what would future become Venrock Associates.

In 1960s and 1970s, venture capital emphasized their firm investment activity mainly on starting
and growing companies. Further, these companies were exploiting innovation in electronic,
medical or data processing technology. As an outcome, venture capital came to be
nearlyidentical with technology finance.

The public achievements of the venture capital industry in the 1970s and early 1980s (e.g.
Digital Equipment Corporation, Apple Incorporation, Gentech) increase to major proliferation of
venture capital investment firm. The number of firm multiplied, and the capital managed by
these firms increased ten folds over the course of the decades.

Development in the venture capital industry remained restricted throughout the 1980s and the
first half of the 1990s.

During 1990s, there were boom time for venture capital Initial Public Offerings (IPO) of stock
for technology and other growing companies were in abundance, and venture firms were paying
huge returns.

The NASDAQ crash and technology shamp the started in March 2000 shook virtually the entire
capital industry as valuation for startup technology companies collapsed. Over the next two year,
many venture firms had been forced to write-off large proportions of their investments, and may
fund were significantly “under water” (the value of the fund’s investment were below the amount

15
of capital invested). The revival of an Internet driven environment in 2004 through 2007 helped
to revive the venture capital environment.

Currently, Venture Capital Environment is at all-time high leading to emergence of all together
new businesses. Innovations are sprouting at fast speed and VC investments are helping them for
realizing full potential of Entrepreneur.

TOP 10 VENTURE CAPITAL FIRMS IN INDIA

1. Kalaari Capital: It was founded in 2006 invests mostly in technology related startups in
India. Vani Kola started the company.

2. Accel Partner: Its vision is to help the global community of entrepreneurs one of the
oldest venture capitalist firms, with an experience of more than 3 decades in this field, it
has backed hundreds of companies and have helped them evolve.

3. Venture East: They are fond of investing in completely new, strange and potential ideas,
support them and help them establish themselves in the competitive market of India.

4. Tiger Global Management: “Tiger Global will invest in anything large.” Like the name
suggests, the Venture Capital firm conducts its business globally. As per the recent news,
the company manages assets of $4.4 billion worth. The company has invested in some of
the biggest established companies like Apple, Google and LinkedIn.

5. Nexus Venture Partner: Nexus Venture Partners, work in collaboration with the Silicon
Valley and India, and help the potential entrepreneurs in every stage of the business.

6. Helion Venture Partners: It was founded in 2006, Helion Venture Partners is based in
Mauritius. Apart from providing monetary help, this venture capital firm forms a close
association with the startup, and help them to solve some complicated issues or problems.

7. Blume Venture: Blume Ventures: It was founded by Karthik Reddy and Sanjay Nath in
2001, with more than 60 active companies, this Venture Capital firm helps the startups
through multiple rounds of funding.
16
 8. Sequoia Capital: Sequoia Capital is one of the oldest Venture Capital firm, founded in
the year 1972. This investing firm, based in Menlo Park, California invests in startups
with revolutionary idea.

9. Saif Partner: It was founded in 2001 invests between $30M and $35M in unlisted
ventures in their growth stage, and amount in the range of $10M to $100M in early stage
ventures.

10. IDGS Venture Capital: This venture capital firm helps companies understand their
position in the market and formulation of effective strategies to survive in this global
competitive market.

What do Venture Capital look for?

Venture capitalists are high risk taker or investor, they accept these risks in order to get higher
return on their investment. The VCI or Investor manage risk –reward ratio by only funding in
business which fit for their potential growth or return but only after completing Due diligence.

Investor or Capitalists have different operating approaches according to the location of the
business, size of the investment, industry specializations, structure of the investment, stages of
the company and involvement of the capitalists or investors in the business activities.

The Venture Capital firm will ask for the prospective investee for regarding products or services,
companies strategies, policies, companies balance sheet, companies sales turnover, customer
relationship, How the company operates, where the fund required for which activity and how
they will used the funds, projects that are under the company, all these questions are asked by the
capitalists before giving the funds.

All these above questions should be answered in the Business plan.

17
Growth of Venture capital industry

Up to 1996: The Early Years

• People were not product about this idea; they waver to execute their arra

 Funds that were prepared for funding speculation were less

 At that time financial speculators for the most part from banking foundation.
 Banks moved toward the subject of endeavor subsidizing more probable they
moved toward obligation financing of an undertaking.

• Valuation were low.

• No rivalry between investment organizations.

• Indian business people had not yet found the investment course to subsidizing and
development and it reflects little sum that were contributed.

• There was no dynamic cooperation in the investors in innovative exercises.

• Business improvement through systems

1997 to 2000: The Rock n Roll Year

 In 1996 SEBI guidelines were huge incentive for domestic and foreign venture capital
companies to focus their attention in India.
 The range of venture capitalists were spanned incubators, angel investors, even private
equity, classic venture capital and the lines between them begun to blur.
 Venture capitalists were instrumental in introducing risks taking too many, members of
the professional class.

18
2001 Year: The Reality Year

 The people who had enter in the venture capital were truly impressive
 There were finance non-finance professionals were entering in the industry with little or
no experience were running the companies.
 Venture capital community finally realized the business an ongoing process, this added to
the maturation cycle of 5 to 7 years.
 Domestic venture capital firms had realized the potential of Indian entrepreneurs.
 Legislative support has been tremendous reforms.
 At last, survey was conducted by the international agencies like Deloitte and EY they
conclude that Foreign Investors attractiveness among India is increasing.

19
LITERATURE REVEIW

20
 CHAPTER- 2

LITERATURE REVIEW

There were limited literature review for Venture Capital in India, Following are insightful
worked done by some authors.

1. M Pandey (4, April 1998)

The author investigates about the process of developing venture capital in India, The discussion
document of experience of the largest venture capital firm in India i.e. TDICI in iniating and
developing the concept of venture capital India as well as learning the venture capital business.
The history of venture capital in India in recent, it only goes back to mid-80s. The venture capital
had faced many problem in raising fund, there main focus was investment high technology
business, and they shifted to the high potential growth, and higher profitable business.

2. Bygrave and Timmons (1992)

The venture capital firms had exchanges between financial specialists, investment firm and
portfolio organizations was featured in the investigation. Investment put into a task, which
include a few hazard, Entrepreneur, went to financial speculator for reserve for its new business
in light of the fact that around then banks were not excessively much proficient for giving
advance.

3. Fried and Hisrich (1994)

He described that venture capitalists reject offers that are unable to meet the venture capital
firms’ investment norms. Some ventures were failed in certain sectors, and appears generally
doubtful. Some quick and broad measures were frequently chosen so that the deals that will be
later on subjected to an in-depth evaluation.

21
4. Robinson (1997) and Kaplan Stromberg (2000)

Independently, numerous investigations have found that VCs are worried about the capacity of
senior administration to go about as pioneers and be perceived as pioneers by others . As
indicated by certain examinations, VCs normally survey the nature of a supervisory group, for
example, VCs incline toward when an administration group is adjusted, for example it is made
out of individuals with various useful foundations and abilities

5. Mason and Harrison (1999), Mishra (2005)

venture capital plays an important role in the entrepreneurial process by providing equity capital
and managerial support for expanding, growingbusiness high risk and high tech private
companies with the potential to develop into major global businesses.

6. Kumar and Kaura (2003)

The examination discovered that a supported exertion was constantly required in the objective
market which was profoundly careful. This examination reasoned that Indian investors don't
appeared to be one-sided for high innovation adventures and furthermore the numbers of
effective endeavors were not greetings tech.

7. Subbulakshmi (2004)

Has distributed an altered volume on funding industry in India. The book orders different
research articles in connection to the job of funding in cultivating business enterprise prompting
by and large financial development. The birthplace and the administrative structure of Indian
funding industry just as the improvement of investment in US, Taiwan what's more, China.

22
8. Selva Kumar and Ketharaj (2009)

has given the inborn quality by method for its human capital, specialized abilities, cost-
aggressive workforce, research and enterprise. India can release unrest of riches creation and
quick monetary development in a manageable way. There is a requirement for hazard account
and investment condition, which can use advancement, advance high-fi innovation, and outfit
information based thoughts.

9. Groh A.P., AND Non Liechtenstein H.(2011),

Contributed to the information of the capital stream from institutional financial specialists by
means of investment (VC) assets as mediators to their last goal, enterprising endeavors. They
observed the top criteria to be the normal arrangement stream and access to exchanges, a VC
reserve's noteworthy reputation, business person nearby market understanding, the match of the
experience of colleagues with the proposed venture technique, the group's notoriety, and the
instruments proposed to adjust enthusiasm between the financial specialists and the VC

10. Prashant T. Patil, Dr. V. N. Sayankar, and Dr. Madhulika A Sonawane. (2016)

Investment industry in India is becoming quicker because of positive financial conditions and
favorable. A monthly Double-Blind Peer Reviewed Refereed Open Access International e-
Journal - Included in the International Serial Directories. Global Research Journal of
Management and Commerce business condition. Pioneering foundation, thought/item suitability,
businesssupportability and rivalry are the real determinants on interest side considered by VC
firms in screening of proposition for venture. Lastly the examination likewise uncovers that
speculators are searching for administrative control in the endeavor where they will contribute as
their ventures are in danger in right on time and development phase of speculations.

23
RESEARCH METHODOLOGY

24
 CHAPTER- 3

RESEARCH METHODOLOGY

Research Methodology is an approach to efficiently tackle the examination issue, In it ,well

ordered strategies are pursued to take care of issue. It alludes to look for information.

It can likewise be characterized as a logical and orderly look for appropriate data on a particular
point. The investigation is completed around various wellsprings of information in regards to
funding money in India. The information is dissected utilizing distinctive elements of Microsoft
exceed expectations and Microsoft office word.

Methods of collecting data

The study is based on Secondary data on Venture Capital investment in India. The data is
collected from different sources and from Helion venture capital (Gurgaon) through
questionnaire among which I found 80 respondents out of 100 questionnaire.

 Magazines
 Journals
 Slideshare
 Trading economic website
 Google
 Indian venture capital association report
 And many other books, Articles and publication reports

RESEARCH DESIGN

Research configuration is a manner by which the examination is done. It function as a blue print.
Research configuration is the plan of conditions for the gathering and investigation of

25
information in a way that means to join importance to the examination reason with economy in
method.

The Research design is the Descriptive Research. The examination is finished with simple
perceptions. Prescient examination is done so as to know design for not so distant future venture
design.

NEED FOR STUDY

1. To know whether venture capital funds supply any capital/services to existing companies.

2. To understand that venture capital fund provide seed capital and development capital.

3. To understand that venture capital funds provide capital to new business in foreign operations

4. To understand venture capital financing, its uses and scope of activities.

LIMITATIONS

1. The main limitation of this research is that it depend on information reported by VCs.
Previously, several scholars have criticized studies based on VCs’ self reports.

In this research, however, I sought toavoid this limitation by asking VCs to assess the likelihood
of their investment basedon some new information they received after having completed the
initial due diligence.

2. The study was based on data provided from different sources, any incorrectness or biasness in
same might also have been resulted in same for study.

3. The information was limited for this topic.

4. It takes lots of time to gather information and interact with venture capitalist.

26
 ANALYSIS AND
INTREPRETATION

27
 CHAPTER- 4

ANALYSIS AND INTREPRETATION

Q1. Have you ever faced a problem in giving venture capital for a new business?

a) No

b) Yes (If yes then please mention it)

No

Yes

INTREPRETATION- 65% of the problem are faced by venture captitalist by giving fund, the
problems are risk to loose the money,Poor cash flow management,failing to get the proper legal
agreements,etc.

40% of the people do not have problem while giving fund to the entrepreneur the business.

28
Q2. What are the challenges you faced while giving Venture Capital Funds to the entrepreneur?

1. Involve high risk.

2. Lengthy process (takes time in investing the details of the entrepreneur)

3. Expectation of getting higher return.

4. Negotiations with the entrepreneur.

5. Chances of losing money.

10%
30%
20% Lengthy process
Expecting higher retun
Negotiation
15% Losing money
25%
higher return

INTREPRETATION- With the help of this pie chart, we can easily see the challenges faced by
the venture capital while giving funds to the entrepreneur.

AS getting higher return on investment is very difficult and the chances of losing money are also
high. So, capitalist needs to know detail, background of the company, last five year balancesheet
of the company before giving funds to the entrepreneurs.

29
Q3. There are certain issues, which are considered while deciding on venture capital investments, some
of which are given below. Kindly rate their importance (1-Not Important, 2-Slightly Important, 3-
Important, 4-Quite Important, 5-Very Important).

Features of Entrepreneurs

1. Leadership qualities 1 2 3 4

2. Integrity and commitment 1 2 3 4

3. Long term vision 1 2 3 4

4. Commercial orientation 1 2 3 4

5. Technical expertise 1 2 3 4

6. Financial expertise 1 2 3 4

7. Knowledge of market 1 2 3 4

8. Ability to handle a team 1 2 3 4

Ability to handle a
Financial expertise
taem
13%
0%
Leadership Qualities
Technical expertise 31%
13%

Commercial
orientation
12%
Integrity and
Commitment
Long term vision 19%
12%

INTREPRETATION- In the given pie chart we can easily find out the most considerable issue while
choosing venture capital .i.e. Leadership Qualities

30
Q4. Can venture capital help in the economic development?

No and Yes, if so how (1-Strongly Disagree, 5-Strongly Agree).

a) Yes

b) No, if so how (1. Strongly Disagree, 2. Strongly Agree).

0%

40%
Yes

60% No

INTREPRETATION- 60% of the capitalist says that venture capital help in economic
development, as it is shown in graph and 40% of the are disagree.

31
Q5. Can venture capital support in making industrial unit in more economical way? Yes or No,
if Yes so how (1. Agree, 2. Disagree, 3. Strongly Agree 4. Strongly Disagree).

a) Yes

b) No

STRONGLY DISGREE
30

STRONGLY AGREE
25

DISAGREE
15

AGREE
30

0 5 10 15 20 25 30 35

INTREPRETATION- Venture capital help in making industrial unit, as it is shown in graph that
the percentage of Agree is the highest and lowest people are Disagree.

32
 Q6. Is government helping in promoting Venture Capital Funding in the state?

No or Yes, if yes so rate how government can promote venture capital by

1. Providing better infrastructure 1 2 3 4

2. Establishing incubators 1 2 3 4

3. Improving manpower issues 1 2 3 4

4. Faster clearance of investment proposals 1 2 3 4

5. Providing tax concessions 1 2 3 4

35

30

25

20

15

10

0
Proving better Establishing Improving manpower Providing tax Fast clearance of
incubators issues concession investment proposal

INTREPRETATION- Fast clearance of investment proposal has the highest rate among all five
and the least rated one is Establishing incubator.

33
Q7. Is syndicate structure a better option to invest venture capital funds?

a) Yes

b) No

0%

35%

65%

Yes No

INTREPRETATION- 65% of the people have said that syndicate structure is a better option to
invest venture capital funds in

34
Q9. What are the various areas of interest for a venture capital?

1. Software

2. Hardware

3. Telecommunication

4. Biotechnology

5. Media/Entertainment

6. Real Estate

7. Any other (Please Specify)

Other

Real estate

Media/ Emtertainment

Biotechnology

Telecommunication

Hardware

Software

0 5 10 15 20 25 30 35 40

INTREPRETATION- In the given bar graph we can easily look on the highest ranked areas.

35
Q10. There are various stages of venture capital. Which of these would you consider before
giving fund?

Seed financing

Start up financing

Early stage/growth financing

Development/expansion financing

Mezzanine financing

Management Buy in/ Buyout

60

50

40

30

20

10

0
Seed financing Start up Early stage Expansion Mezzaine MBO/ MBI
stage

INTREPRETATION – These are different stages of financing among which Seed financing are
considered the most and then investors considered the Start up and Expansion stage (where the
entrepreneur try to expand their business, for which he require lots of amount and potential for
expanding his business).

36
 FINDINGS

 There was exponential increase in venture capital from 2007 till today.
 Total there are 180 venture capital finance company are available as of now which is
listed by SEBI.
 Kalaari Capital is of the top venture capital firm among all the venture capital firm in our
country.
 The internet software and services is the number one in venture capital finance.
 The venture capital finance increased vastly from the year 2012 to 2015.
 65% of the problem are faced by venture capitalists while proving fund.
 Venture capital is a long process, which require lots of information like background of
the entrepreneur.
 It also help in economic development.
 Now, government is also helping and promoting venture capital firm by providing better
infrastructure, improving manpower issues, and tax concession.

37
CONCLUSION

38
 CHAPTER- 5

CONCLUSION

From this study, we can get a clear idea about the venture capital firm in India and also its
challenges faced by venture capitalist before investing and there certain issues which has to look
upon by capitalist like company background, its balance sheet and profit & loss account etc.
Venture capital not only provide capital to the firm but also help in giving suggestion, solving
problem and helping economic development. And we also get to know about the most risky stage
of financing i.e. Seed financing and Expansion stage. And the area which required lots of
financing is Software companies. Now government is also helping venture capital industry by
giving tax concession and proving better infrastructure. As entrepreneurs are unaware with
venture capital because they think that venture capital is looking for an extraordinary high return
on the investment. However, it is important to understand the venture capital in India.

39
BIBLIOGRAPHY

40
 CHAPTER- 6

BIBLIOGRAPHY

www.google.com

www.slideshare.com

https://www.bing.com

www.venturecapital.com

www.ifciventure.com/

BOOKS-

I M Pandey – Venture capital development process in India (1998)

Mc Kinsey & company- Venture capital industry (September, 1998)

41