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A Perspecti

Statutory Warning: The views expressed herein are s

reflect those of the Private Equity fraternity.

v

e

Nikhilesh Goel [email protected]

olely those of the author and do not necessarily

8/4/2019 PE_Avigo


Parental Guidance: Those who’ve come only for att ndance can walk out now. Here on it gets really boring.

8/4/2019 PE_Avigo


8/4/2019 PE_Avigo


Data

Dum ed

Process

Bullshit

The Fin

Informationd

Secret Sauce

Knowledge

Line

8/4/2019 PE_Avigo


Sou

Sha

SR

N

Loa

L

Income

Sales

Other Income

Change in Stock

Total Income

Expenditure

Cost of Goods Sold

W

U

Def

Tot

GP %SG & A

EBITDA

EBITDA %

Depreciation

Write-offs

Extra-ordinary IncomeFinancial Charges

PBT

PBT %

less: Provision for Taxes

less: Other Provisions

PAT

PAT%

Dividend

rces of Funds

reholders' Funds

are Capitalserves & Surplus

t Worth

n Funds

ng Term Debt

Application of Funds

Fixed Assets

a. Gross Blockb. Less: Depreciation

c. Net Block

d. Capital WIP

Investments

K Debt

secured Loans

erred Tax Liability

l

Current Assets, Loans & AdvancesInventories

Sundry Debtors

Cash & Bank Balances

Loans & Advances

Total Current Assets

Current Liabilities & Provisions

Current Liabilities (incl. Creditors)

Provisions

Total Current Liabilities

Net Current Assets

Misc. Expenditure

Total

8/4/2019 PE_Avigo


• The primary sources of equity capital arpromoter’s contribution, private equity anpublic markets

“Private equity is a broad term whnon-public Ownership Equity securities

• e source o qu y s n e o e p asethe life of the firm

• Private equity is a medium term financprovided in return for an equity stake- Private Equity is the most appropriat

form of equity in the growth phase

• PE firms provide strategic inputs to thcompany, which enhance the value of thcompany and hence their stake

Promoter's Equity Private Equity Public Markets

Different Forms of Equity

ch commonly refers to any type of hat are not listed on a public exchange”

PE PIPE

Start-upStart-up GrowthGrowth MaturityMaturity

Promoter’s

Equity

Promoter’s

Equity

Private

Equity

Private

Equity

Public

Markets

Public

Markets

Risk

Life of the Firm (In years)

Valueof theFirm

8/4/2019 PE_Avigo


8/4/2019 PE_Avigo


Entrepreneur/

Business

Investment

Banker/Advis

Discussion/Meeting

with the promoters

Proposal

Received

Term Sheet

Submitted

Business and

Legal Due-

Diligence

Valuat

Negotiat

rPrivate Equity

Exit

ocumentation and

Disbursement

on

ions

Monitoring & Value

Addition

8/4/2019 PE_Avigo


Venture

GrowthDistressed

Stage

Late-Stage/

BuyoutSecondary

SectorFocus

Social

Focus

Geography

FocusProp Books

edge FundModel

Focus

8/4/2019 PE_Avigo


• Growth Capital

― Corporate debt is an underdeveloped ass

― Long tenor bank loans for SMEs is still d

• Excessive dependence on the Promoter

― In most private cos., a lot of functions arGroup. This leads to inadequate time dev development.

― Private companies continue to need greatcompetitiveness – should that be by incrcollaboration partners and or seeking ne

• Human resources

― Talent retention more challenging for sm

― Stress on ESOPs

• Corporatization

― Do you think, behave, report like a publi

― Up the IPO-quotient

t class in India especially for SMEs.

eveloping

handled by the Promoters/Promoteroted towards strategy and business

er strategic direction to achieve globalasing operational efficiencies, identifying growth areas (organic/ inorganic)?

aller companies

company?

8/4/2019 PE_Avigo


• Strategic Guidance

- PE firms can help companies by being their in-house Strategy and CorporateFinance resource

• Financial Planning

- Assisting companies raise equity ordebt, and more importantly working

• Business growth

- Securing additional business for theirinvestee companies, through customerintroductions

• Human resource development

- PE firms can help in recruitment of right talent.

• Market Agnostic

- Available in weak public markets

• Anchor Investing

Business

Growth

Strategic

guidance

Human

Resourcemanagement

Investing

Market Agnostic Corporatisation

Equity

Planning

Private

Shareholding

8/4/2019 PE_Avigo


• Challenging work

- Eclectic mix of all management v

• Best-in-Breed peer group

- Where is Al Gore, Arun Sarin, S

• Retain your entrepreneurial spirit

-

• Sector agnostic knowledge

- Be the Oracle, Unwaba, er..what

• Partnership

- I am allergic to bosses!

• Its all about the money, honey!

- And they say only a smile was wort

erticals

njay Nayar, Vindi Banga…

ver..

a million bucks ☺

8/4/2019 PE_Avigo


“which way I oug

“That depends a good de to,” sa

t to go from here?”

l on where you want to get d the Cat

pe_avigo

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