RECENT CHANGES IN VENTURE CAPITAL REGULATION（四）.docVIP

RECENT CHANGES IN VENTURE CAPITAL REGULATION By Vinod Kumar Raina, Company Secretary, New Delhi Preliminary: The object of the venture capital financing is to invest in high-risk projects with the anticipation of high returns. The funds are invested in such growing enterprises, where the ideas are there but the conventional funding from banks, financial institutions are not available. This is because that these enterprises do not have collateral to offer. These type of enterprises are usually first generation enterprises. Venture capitalists generally: Finance new and rapidly growing companies Purchase equity securities Assist in the development of new products or services Add value to the company through active participation Take higher risks with the expectation of higher rewards Have a long-term orientation Investment in India by Venture capitalists. Given hereunder is the list of sectors where the investment is usually made by the venture capital companies. IT and IT-enabled services Software Products (Mainly Enterprise-focused) Wireless/Telecom/Semiconductor Banking PSU Disinvestments Media/Entertainment Bio Technology/Bio Informatics Pharmaceuticals Electronic Manufacturing Retail In this article the latest changes in venture capital regulations have been given. Definition of Venture capital: Definitions in various countries: India: Venture capital fund is a fund formed as a trust or a company under the regulations which Has dedicated pool of capital raised in the specified manner and invested in venture capital undertaking Venture Capital undertaking is domestic company, whose shares are not listed which is in the business for providing services, production or manufacturing of articles which are not in the negative list. Each scheme launched or fund set up by a venture capital fund shall have firm commitment from the investors for contribution or an amount or at least Rupees five crores before the start of operations by the venture capital fund Negati