PRESENTATION ON CHIT

FUND AND VENTURE

CAPITAL
Meaning: Chit funds are a form of financial arrangement that
combines savings and borrowing. they are a popular traditional financial
practice in many countries, particularly in India, where they are regulated by the
Chit Funds Act, 1982. Chit funds operate as a type of collective investment
scheme, allowing a group of individuals to pool their resources together for a
defined period. The primary purpose of chit funds is to provide members with
access to funds in a systematic and regulated manner.
Purposes of chit fund
◦ Access to fund
◦ Systematic saving
◦ Short-term borrowing
◦ Emergency fund
◦ Group investment
◦ Loan repayment
◦ Interest earnings
Characteristics of chit fund
◦ Collective saving and borrowing
◦ Regular contributions
◦ Rotating payouts
◦ Interest earning
◦ Risk of default
◦ Regulation
 Types of chit funds
◦ Regular chit fund
◦ Dividend chit fund
◦ Auction discount chit fund
◦ Limited liability chit fund
◦ Saving chit fund
◦ Monthly income scheme chit funds
◦ Cycle skipping chit funds
 Venture capital funds
◦Meaning : Venture capital (VC) funds are
investment funds that provide capital to early-
stage, high-potential startups and small businesses
in exchange for equity ownership or convertible
debt. These funds play a crucial role in supporting
and nurturing innovative and promising companies
with the goal of achieving high returns on
investment.
Importance of venture capital funds
◦ Access to capital
◦ Expertise and mentorship
◦ Acceleration of growth
◦ Validation and credibility
◦ Networking opportunities
◦ Alignment of interests
 Features of venture capital funds

◦ Early – stage focus

◦ Equity investment
◦ Risk and high returns
◦ Active involvements
◦ Illiquidity
◦ Diversification
 Types of venture capital funds

◦ Early –stage venture capital

◦ Seed capital funds
◦ Growth or expansion capital funds
◦ Late-stage venture capital
◦ Sector – specific funds
◦ Regional funds
◦ Corporate venture capital (CVC) funds
◦ Angel funds