Presented by ASHIS MOHANTY SWAGATA SENGUPTA TRUPTIMAYEE DALASINGHRAY

Venture capital is a form of equity financing especially designed for funding high risk and high reward projects with the objective of earning a high rate of return.

EQUITY PARTICIPATION LONG-TERM INVESTMENT PARTICIPATION IN MANAGEMENT HIGH RISK-RETURN

FINANCING STAGES

Bridge

Financing
Third Stage Second Stage Start up Stage Seed Stage

 Seed or Concept stage financing: The venture is still in idea formation stage and its product and service is not fully developed. The usually investor is given a small amount of capital to come up with a working prototype.

Start up financing: When the firm is set up to manufacture a product or provide a service, start up finance is provided by the venture capitalist. This is for full scale manufacturing and further business growth . First-stage financing: The venture has finally launched & achieved initial transaction, Sales are trending upwards. The funding from this stage is used to fuel sales, reach the Breakeven point, increase productivity, cut unit costs, as well as to build the corporate infrastructure and distribution system.

 Second-stage financing: Sales at this stage starting to snowball. The company is also rapidly accumulating account receivables and inventory. Capital from this stage is used for funding expansion in all its forms from meeting increasing marketing expenses to entering new markets to financing rapidly increasing account receivables.

Third stage financing: At this stage future is so bright . Everything looks good, Sales are climbing, Customers are happy. Money from this financing used for increasing plant capacity, marketing, working capital, and product improvement and expansion.
Bridge financing: At this point the company is a proven winner and investment bankers have agreed to take it public with in 6 months. Bridge financing is a short term form of financing used to prepare a company for its IPO.

ADVANTAGES OVER OTHER FORMS OF FINANCE

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. Venture capitalists are rewarded by business success and the capital gain. The venture capitalist is able to provide practical advice and assistance to the company based on past experience with other companies which were in similar situations. The venture capitalist also has a network of contacts in many areas that can add value to the company, such as in recruiting key personnel, providing contacts in international markets, introductions to strategic partners, and if needed co-investments with other venture capital firms when additional rounds of financing are required. The venture capitalist may be capable of providing additional rounds of funding should it be required to finance growth.

VC IN INDIA
In 1973 a committee on Development of small and medium enterprises highlighted the need of VC as a source of funding new entrepreneurs and technology.

VC was First recognized in the 7th five year plan.

VC financing really started in India in 1988 with the formation of Technology Development and Information Company of India Ltd. (TDICI) promoted by ICICI and UTI.

 The first private VC fund was sponsored by Credit Capital Finance Corporation (CFC) and promoted by Bank of India, Asian Development Bank and the Commonwealth Development Corporation viz. Credit Capital Venture Fund.

Gujarat Venture Finance Ltd. and APIDC Venture Capital Ltd. were started by state level financial institutions in early 90s.
Foreign venture Capital Funds came to India after 1995

LEASE FINANCING
A finance lease or capital lease is a type of lease A lease is a contract whereby the owner of an asset grant to another party the exclusive right to use the asset usually for an agreed period of time in return for the payment of rent.

TYPES
Finance lease Operating lease Sale and lease back lease Direct lease Single investor lease Leveraged lease Domestic lease International lease

ADVANTAGES

DISADVANTAGES