Venture Capital Outline

Venture Capital Means :

Funds made available for startup firms and small businesses with exceptional growth potential by professionals.

1. Venture Capitalists look for :

Commercially viable, Identifiable market, Strong management ,Sustainable competitive advantage.

2. Role of a Venture Capitalist in an Enterprise

Providing funds,Providing insights to the evolving business strategy, Developing alliances and partnerships,Providing networking access to vital prospective customers, Assistance in head hunting for senior positions, Sharing vital and relevant information.

3. Types of VC Funding.
Seed Capital-- Start-up Capital-- Early Stage Capital-- Expansion Capital.-- Late Stage Capital-- Bridge Financing.

4. Steps in VC Financing
  Selection of Investment Stages of Financing o Early stage o Later stage Financial Analysis Structuring the Deal Investment Nurturing/Aftercare Valuation of Portfolio Exit

    

5. Alternatives to VC Funding : Angel investor, Strategic investor 6. VC funding process

Step 1: Business Plan Submission, Step 2: Introductory Conversation/Meeting Step 3: Due Diligence Step 4: Term Sheets and Funding

7. VC Investment process.
y Establishment of contact between the entrepreneur and the venture capitalist. y Preliminary Evaluation y Detailed approval.

y Sensitivity analysis. y Investment in the project y Monitoring the project and post investment support.

8. Criteria for Evaluation

y y y y y y y y Credentials and track record of the founding team Market potential for the concept or idea Technology dependence and intensity Sustainable competitive advantage Scalability of business Execution capabilities Risks and mitigation strategies Exit options

9. VC exit strategy  Initial Public Offering o Requires revenue visibility o Requires backlog o Requires a complete team o Ready for post-IPO issues (e.g. lawsuits, etc.)  M & A Usually for an asset o Technology, product, people

10.The Ideal Venture Capitalist Investor.

y y y y Knowledge of industry, deal structuring and exits Industry and VC network Ability to stay over 2 to 3 rounds Assistance with business strategy, recruitment, fund raising, partnering, customer contacts and exits (IPO, M&A) y Active board participation