venture capital（一）.pptVIP

VENTURE CAPITAL  PRIVATE EQUITY INDIAN EXPERIENCE BY G. N. BAJPAI IMPERATIVES OF VENTURE CAPITAL (VC) Technological progress is the key driver of economic growth Technological progress involves: Improvement in skills Better capital equipment New products, processes business methods Technological progress in emerging economies will emerge from enterprises catch-up Technology capacity is necessary to adopt technologies to local conditions VC encourages technological progress via research development VC converts research development into new ventures FINANCING STAGES DURING LIFE- CYCLE OF INITIATIVE VC funding is special which enterprises tap at different stages of life cycle of initiative Seed - to prove concept Start-up - product development market testing First stage - commercial production Second stage - expansion to scale Later stage - expansion of profitable enterprise Bridge/ Mezzanine - preparation for going public SNAPSHOT OF INDIAN VENTURE CAPITAL SCENARIO EVOLUTION OF PRIVATE EQUITY FINANCE EVOLUTION OF PRIVATE EQUITY FINANCE (cont.) EVOLUTION OF PRIVATE EQUITY FINANCE (cont.) EVOLUTION OF PRIVATE EQUITY FINANCE (cont.) INDIA RISK CAPITAL INVESTMENTS BY STAGE 2003-05 VC IN INDIA Securities Exchange Board of India (SEBI) regulates both Domestic Venture Capital Funds Foreign Venture Capital Investors Registration benefits Income passes through to investors without tax when Trusts are registered under the Indian Trust Act Venture Capital Companies FVCIs freely remit funds to India for investments in Indian venture capital undertakings (VCUs) SEBI registered DVCFs FVCIs are exempt from both the entry exit pricing regulations that otherwise apply to foreign investors, such as market-related pricing on disinvestment Sale of shares by VCFs to company insiders post- listing is exempt from SEBI takeover code VCFs automatically obtain (“QIB”) Qualified Institutional Buyer status, which is useful in participating in new security placements Exempti