1. TEAM 6 VENTURE CAPITAL AND SOCIAL ENTREPRENEURSHIP

2. T H E N E X T B I G E N G I N E P A V I N G E C O N O M I C G R O W T H VENTURE CAPITAL FUNDING 3. VENTURE CAPITAL Money provided by investors to start up firms and small businesses with perceived long-term growth potential. This is a very important source of funding for start ups that do not have access to capital markets. 4. UNIQUE FEATURES Investment in high-risk, high-returns ventures Participation in management Expertise in managing funds Raises funds from several sources Diversification of the portfolio Exit after specified time 5. TYPES OF VENTURE CAPITAL FUNDS On the basis of Promoters Central Government controlled Development Financial Institutions Public Sector Banks Foreign Banks or Private Sector Companies and Financial Institutions State Government controlled Development Finance Institutions 6. METHODS OF VENTURE FINANCING Equity Conditional Loan Income Note Other Financing Methods 7. STAGES OF VENTURE FINANCING Seed Money Start Up Growth (Series A round) Second Round Expansion Exit of Venture Capitalist 8. WHAT DO VENTURE CAPITALISTS LOOK FOR? Business Potential Company Background Core Plan Promoter Details Management Business Model Valuation Expectation Return Expected 9. HOW IS A BUSINESS PLAN PRESENTED? * 10. VENTURE CAPITAL INVESTMENT PROCESS 1. Deal Origination 2. Screening 3. Due Diligence Evaluation 4. Deal Structuring 5. Post Investment Activity 6. Exit 11. TO DO NOT TO DO Business Consultations Management Consultations Human Resources Additional Resources Internal Problems Equity Position Decision Making Milestones and Targets VENTURE CAPITAL FUNDING OR 12. MAJOR TRENDS IN VENTURE CAPITALIST INDUSTRY Latest Trend Bio Technology Sector Upcoming Sectors BPO Financial Services Real Estate All Time Favorites Transport Logistics 13. VENTURE CAPITAL IN INDIA Can Help in rehabilitation of Sick Units Can Assist Small Ancillary units upgrade their Technology Can Provide Financial Assistance to Students coming out of Universities and Institutes 14. CHALLENGES IN INDIAN SCENARIO 1. Not well understood by: Entrepreneurs Investors Government Agencies 2. Businesses were traditionally closely held family operations. The concept of selling out a company to a strategic investor or rival was foreign 15. CONTINUED 3. Recent years the growth of Venture Capital Business has been drastically decreasing 16. CISCO: A LANDMARK CASE 17. CISCO: A LANDMARK CASE An American multinational corporation headquartered in San Jose, California, United States The world's leading manufacturer, designer and supplier of computer networking products Large corporations Service providers : Internet and telecom service providers Small and medium businesses for their operating networks MAIN MARKET SEGMENTATION 18. TRACING THE JOURNEY 1984 Established on a very tight budget. Late 1980s The commercial market for internetworking began to develop, CISCO's reasonably priced, high-performance routers gained recognition. High rate of sales growth, but company was still short of cash. Turned to a venture capitalist, Donald T. Valentine of Sequoia Capital. 19. CONTINUED February 1990 CISCO Systems went public (with a market capitalization of $224 million) and was listed on the Nasdaq stock exchange. Early 1990s Rapid Growth As Networks Proliferate. 1993-94 First Wave of Acquisitions, as it acquired Crescendo Communications. CISCO hired talent from smaller, struggling networking companies which were laying off personnel. 20. CONTINUED Late 1990s CISCO Systems was the undisputed king of the networking world. Early 2000s CISCO's market value surpassed $ 450 billion, making it the third most valuable companies in the world behind Microsoft and General Electric Company. 21. THE OTHER SIDE OF THE COIN The VC however, required that the owners surrender to him a controlling stake in the company. Mr. Valentine, thus, became chairperson and then hired an outsider, John Morgridge, as the company's new president and chief executive officer. The new CEO also replaced the friends of the couple who were the back bone of CISCO. Under the new CEO, the husband was given the title of chief scientist and the wife was made head of customer services. However, later the wife did not get along well with the new CEO and so, she was fired from her own company and the husband also quit. 22. VENTURE CAPITAL CONCLUSION Venture capital entrepreneurship and innovation have been closely connected Though most of venture funds state that high technology is their priority only firms started by experienced persons find support by VCFs. Capability for assessing venture projects continues to be a weak area because of the lack of prior experience. 23. B E Y O N D C S R SOCIAL ENTREPRENEURSHIP 24. AGENTS OF CHANGE Business Skills + Leadership Skills = Economic and Social IMPACT Adopt a mission to create and sustain social value Recognize and relentlessly pursue new opportunities Engage in continuous innovation, adaptation, and learning Exhibit a sense of accountability to the served and for the outcomes created. Seizing Overlooked Opportunities Improving Systems Environmental Challenges Social Challenges Inventing New Approaches Create Sustainable solutions for 25. GRAMEEN BANK Dr. Muhammad Yunus 26. HOW IT STARTED OUTCOMES Bangladesh, 1975 MORE THAN 60% OF THE POPULATION BELOW POVERTY LINE. MAJORITY OF POPULATION OVER AGE OF 7 , ILLITERATE Farmers, Craftsmen, Female entrepreneurs needed cash flows to come out of the vicious cycle of poverty. Yunus realized the solution Bank Loan After Dhaka Banks reject idea, Yunus starts lending money to female entrepreneurs. From 15000 borrowers in 1980 membership increased to 2.3mn in 2002 The banks total disbursements increased from US$498 in 1976 to US$170mn in August 2002. 95% of the borrowers were women! Loan repayment rate was 95% Activities were spread across 41,000 villages GRAMEEN BANK- Dr. Muhammad Yunus 27. STRUCTURE Voluntary formation of small groups of five people. Receives mutual, morally binding group guarantees in lieu of the collateral. At first only two members of a group are allowed to apply for a loan. Depending on their performance in repayment the next two borrowers can then apply and, subsequently, the fifth member as well. 28. TAKE AWAYS The bank as True Educator Women given equal access to the schemes, proved not only reliable borrowers but astute entrepreneurs. Helped women raise their status, lessen their dependency on their husbands and improve their the nutritional standards of their family. Empowering people through self employment and entrepreneurship to eradicate poverty. I OBSERVE THE POLICY OF THE COMMERCIAL BANKS AND DO EXACTLY THE CONTRARY. I BELIEVE ALL HUMAN BEINGS ARE POTENTIAL ENTREPRENEURS -MUHAMMAD YUNUS, NOBEL PRICE LAURETE 29. OUR TAKE Venture Capitalists, may prove to be motivation for the initiatives undertaken for the betterment of the society, requiring substantial capital and proper implementation. Thus, nurturing Social Entrepreneurs. 30. REFERENCE www.rediff.com/money/2007/may/08vc.htm www.indianmba.com/faculty_column/fc159/fc159.html www.mbaskool.com/business-articles/finance/267-venture- capital-funding-pros-and-cons.html www.antiventurecapital.com/venturecapital.html 31. CREDITS Anuj Khadria 09 Arjun Sharma 11 Ayush Wahi 12 Esha Sharma 32 Niharika Sareen 24 Susanna Puthooran 47 Vaani Malik 50