vcf in bt
TRANSCRIPT
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BY
KAVITARADHIKA
SAINEELA
(PGDMBT)
VENTURE CAPITAL FINANCING IN
BIOTECHNOLOGY
ISSUES AND CHALLENGES
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OUTLINE
y ABOUT VENTURE CAPITAL
y ADVANTAGES OF VC
y FINANCING IN BIOTECHNOLOGY
y FACTORS INFLUENCING VFC IN BIOTECHNOLOGYy ISSUES AND CHALLENGES
y SCOPE OF VC
y CONCLUSION
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ROLE AND SIGNIFICANCE OF VENTURE
CAPITALIST
y It injects long term equity finance which provides a solid capitalbase for future growth.
y The venture capitalist is a business partner, sharing both the risks
and rewardsy The venture capitalist is able to provide practical advice and
assistance to the companyy The venture capitalist also has a network of contacts in many
areas that can add value to the company.y The venture capitalist may be capable of providing additional
rounds of funding should it be required to finance growth.y Venture capitalists are experienced in the process of preparing a
company for an initial public offering (IPO) of its shares onto the
stock
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y United states ahead of Europe and Japan as VC availability is
more there and very much encouraged
y Early stage investments of VC investment in new technology
based firms contributes to 50% of costs (in Europe)y In New Zealand VC investment is 16%
y United states and Europe remain the hubs of VFC followed
by France, Israel
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FUNDING
46
20
1618
BANK FUNDING VC FUNDING FI'S FUNDING INTERNAL FUNDING
FUNDING OF BUSINESS (percentage of 100)
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ISSUES & CHALLENGES
y Limitation on structuring of VCFs
y Lack of incentives to investors
y Uncertainty regarding the success of the product in the
market(long gestation period)y Lack of experienced management team
y Restricted scope of VC to high tech projects
y VCF is still not regarded as commercial activity
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SCOPE OF VC
y VC can help in the rehabilitation of sick units.
y VC can assist small ancillary units to upgrade their
technologies
y VCFs can play a significant role in developing countries in the
service sector including, health care etc.
y They can provide financial assistance to people coming out
of universities, technical institutes, etc thus promoting
entrepreneurial spirits