20MS2004 - Entrepreneurship

and Product Development

Lecture 18 to 21
 IDBI

• IDBI Bank Limited, also known as Industrial

Development Bank of India, is a government-owned
banking and financial services company headquartered
in Mumbai, India.

• It was established in 1964 by the Government of India to

provide credit and other financial assistance to industrial
enterprises in India.

• IDBI is the first Development Financial Institution

(DFI) in India.
 IDBI

• IDBI offers a wide range of financial products and

services, including loans, advances, guarantees,
underwriting, investment banking, and treasury services.

• It also provides financial assistance to small and

medium enterprises (SMEs), infrastructure projects,
and exports.

• IDBI has a network of over 1,000 branches and

extension counters across India.

• It also has a presence in select international markets.

 IDBI

• The bank is ranked 14th among the top 50 Indian

banks by the Business Standard Banking Survey 2023.

• It has also been ranked 13th among the top 500 banks
in Asia by The Banker magazine.

• IDBI is a systemically important bank in India.

• It is also a member of the Indian Banks' Association

(IBA) and the International Monetary Fund (IMF).
 ICICI

• ICICI Bank Limited is an Indian multinational bank

and financial services company headquartered in
Mumbai with registered office in Vadodara.

• It is the second-largest private sector bank in India by

market capitalization and the third-largest by assets.

• ICICI Bank was founded in 1994 as a wholly owned

subsidiary of the Industrial Credit and Investment
Corporation of India (ICICI), a financial institution
founded in 1955.
 ICICI

• The bank was privatized in 2002 and is now listed on

the Bombay Stock Exchange and the National Stock
Exchange of India.

• ICICI Bank offers a wide range of financial products and

services, including savings accounts, loans,
investments, insurance, and wealth management.

• It also has a presence in the areas of corporate

banking, investment banking, and treasury.
 ICICI

• The bank has a network of over 5,200 branches and

15,000 ATMs across India.

• It also has a presence in over 30 countries in Asia,

Europe, and the Middle East.

• It is one of the largest lenders to corporates and

individuals in India.

• In 2022, ICICI Bank was ranked 12th among the top

500 banks in the world by The Banker magazine.
 ICICI

• It was also ranked 10th among the top 1000 banks in

the world by Forbes.

• The bank's mission is to "enable our customers to

achieve their financial goals."

• Its vision is to be "the bank of first choice for our

customers, employees, and shareholders."

• ICICI Bank is governed by a board of directors, which

is headed by the chairman. The board is responsible
for the overall management of the bank.
 SIDBI

• Small Industries Development Bank of India (SIDBI)

is a financial institution established by the Government of
India in 1990.

• It is the principal financial institution for the promotion,

financing, and development of micro, small, and
medium enterprises (MSMEs) in India.
 SIDBI

SIDBI provides a wide range of financial

products and services to MSMEs, including:
• Term loans

• Working capital loans

• Guarantees
• Venture capital funding

• Credit enhancement
• Business development services
 SIDBI

SIDBI also provides a number of schemes and

programs to support MSMEs, such as:
• MUDRA Yojana

• StandUp India
• Pradhan Mantri Mudra Yojana
• Credit Guarantee Fund Trust for Micro and Small
Enterprises (CGTMSE)
• National Entrepreneurship Development Programme
(NEDP)
 SIDBI

• SIDBI has a network of over 400 branches and

extension centers across India. It also has a presence in
select international markets.
• The bank is governed by a board of directors, which is
headed by the chairman. The board is responsible for
the overall management of the bank.
• SIDBI is a major player in the Indian financial sector. It
plays an important role in the financing of MSMEs,
which are a key driver of economic growth in India.
 SIDBI

Key functions of SIDBI:

• To provide financial assistance to MSMEs in the form of term
loans, working capital loans, and guarantees.
• To promote entrepreneurship and innovation among MSMEs.
• To provide training and development programs for MSMEs.
• To facilitate the marketing and export of MSMEs products and
services.
• To coordinate the activities of various institutions involved in the
promotion and development of MSMEs.
 State Finance Corporations (SFCs)

• State Finance Corporations (SFCs) are financial

institutions set up by the state governments in
India to provide financial assistance to small
and medium enterprises (SMEs).

• They were established under the State

Financial Corporations Act, 1951.
 State Finance Corporations (SFCs)

SFCs provide a variety of financial products

and services to SMEs, including:
• Term loans

• Working capital loans

• Guarantees
• Venture capital funding

• Credit enhancement
• Business development services
 State Finance Corporations (SFCs)

• SFCs also play an important role in promoting

entrepreneurship and innovation among SMEs.
• They do this by providing training and development
programs, and by facilitating the marketing and
export of SMEs products and services.
• There are currently 18 SFCs in India, one for each
state and one for the Union Territory of Puducherry.
• The SFCs are governed by a board of directors,
which is headed by the chairman.
 State Finance Corporations (SFCs)

• The board is responsible for the overall management

of the SFC.

• The SFCs are a vital part of the Indian financial

system.

• They play an important role in promoting the growth

of the SME sector, which is a key driver of economic

growth in India.
 State Finance Corporations (SFCs)

Key functions of SFCs:

• To provide financial assistance to SMEs in the form of
term loans, working capital loans, and guarantees.
• To promote entrepreneurship and innovation among
SMEs.
• To provide training and development programs for
SMEs.
• To facilitate the marketing and export of SMEs
products and services.
• To coordinate the activities of various institutions
involved in the promotion and development of SMEs.
 State Finance Corporations (SFCs)

Problems faced by SFCs:

• Lack of funds

• High operating costs

• Lack of awareness
 Venture Capital Funding

• Venture capital (VC) is a type of private equity financing

that is provided by venture capital firms or funds to
startups, early-stage, and emerging companies that have
been deemed to have high growth potential or which
have demonstrated high growth.

• Venture capital firms or funds invest in these early-

stage companies in exchange for equity, or an
ownership stake.

• Venture capitalists take on the risk of financing risky

start-ups in the hopes that some of the companies they
support will become successful.
 Venture Capital Funding

Common types of venture capital funds

include:
• Seed funds: These funds invest in early-stage companies that are still in
the development stage.
• Early-stage funds: These funds invest in companies that have already
developed a product or service and are looking to scale their business.
• Growth funds: These funds invest in companies that are already
growing rapidly and are looking to expand their operations.
• Later-stage funds: These funds invest in companies that are nearing an
initial public offering (IPO).
 Venture Capital Funding

Benefits of raising venture capital funding:

• Access to capital: Venture capital funds can provide
startups and early-stage companies with the capital
they need to grow and develop.

• Expertise: Venture capitalists have a wealth of

experience in the startup and early-stage investment
space. They can provide valuable advice and guidance
to startups and early-stage companies.
 Venture Capital Funding

Benefits of raising venture capital funding:

• Network: Venture capitalists have a large network of contacts
in the business world. They can help startups and early-
stage companies to connect with potential customers,
partners, and employees.
• Exit strategy: Venture capitalists are looking to exit their
investments through an IPO or a merger or acquisition.
This can provide startups and early-stage companies with a
way to generate liquidity for their investors and to achieve a
successful exit.
 Angel Investor Funding

• Angel investment is a type of private equity financing

that provides capital for early-stage businesses, typically
in exchange for convertible debt or ownership equity.

• Angel investors are typically high-net-worth individuals

who invest their own money in startups that they
believe have the potential to be successful.
 Venture Capital Funding

Angel investors can provide a number of

benefits to startups, including:
• Capital: Angel investors can provide the startup with the capital it
needs to get off the ground and grow.
• Experience: Angel investors often have a wealth of experience in
the business world, which they can share with the startup's
management team.
• Network: Angel investors often have a large network of contacts,
which they can use to help the startup raise additional capital or find
customers.
 Venture Capital Funding

Angel investors: (Examples)

• Peter Thiel: Thiel is a co-founder of PayPal and Palantir
Technologies. He is also a venture capitalist and has invested in
many successful startups, including Facebook, LinkedIn, and
Spotify.
• Marc Andreessen: Andreessen is a co-founder of Netscape and
Andreessen Horowitz. He is also a venture capitalist and has
invested in many successful startups, including Twitter, Airbnb, and
Pinterest.
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