Growth of Venture Capital in India
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Venture capital (also known as VC or Venture) is a type of private equity capital typically provided for early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company.
Venture capital investments are generally made as cash in exchange for shares in the invested company. It is typical for venture capital investors to identify and back companies in high technology industries such as biotechnology and ICT (information and communication technology).
Venture capital firms typically comprise small teams with technology backgrounds - scientists, researchers or those with business training or deep industry experience.
VCs also take a role in managing entrepreneurial companies at an early stage, thus adding skills as well as capital . Inherent in realizing abnormally high rates of returns is the risk of losing all of one's investment in a given startup company. As a consequence, most venture capital investments are done in a pool format where several investors combine their investments into one large fund that invests in many different startup companies. By investing in the pool format the investors are spreading out their risk to many different investments versus taking the chance of putting all of their monies in one start up firm.
A venture capitalist (also known as a VC) is a person or investment firm that makes venture investments, and these venture capitalists are expected to bring managerial and technical expertise as well as capital to their investments.
A venture capital fund refers to a pooled investment vehicle (often an LP or LLC) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans.
Venture capital is also associated with job creation, the knowledge economy and used as a proxy measure of innovation within an economic sector or geography.
Venture capital is most attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering.
In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the company's ownership (and consequently value).
STRUCTURE OF VENTURE CAPITAL FIRMS:-
Venture capital firms are typically structured as partnerships, the general partners of which serve as the managers of the firm and will serve as investment advisors to the venture capital funds raised.
This constituency comprises both high net worth individuals and institutions with large amounts of available capital, such as state and private pension funds, university financial endowments, foundations, insurance companies, and pooled investment vehicles, called fund of funds or mutual funds.
TYPES OF VENTURE CAPITAL FIRMS:-
Depending on business type, the venture capital firm approach differ. When approaching a VC firm, consider their portfolio:
- Business Cycle: Do they invest in budding or established businesses?
- Industry: What is their industry focus?
- Investment: Is their typical investment sufficient for your needs?
- Location: Are they regional, national or international?
- Return: What is their expected return on investment?
- Involvement: What is their involvement level?
- Targeting specific types of firms will yield the best results when seeking VC financing.
The National Venture Capital Association segments dozens of VC firms into ways that might assist you in your search. Many VC firms have diverse portfolios with a range of clients. If this is the case, finding gaps in their portfolio is one strategy that might succeed.
ROLES WITHIN VENTURE CAPITAL FIRMS:-
Although the titles are not entirely uniform from firm to firm, other positions at venture capital firms include:
- Venture partners - Venture partners are expected to source potential investment opportunities and typically are compensated only for those deals with which they are involved.
- Entrepreneur-in-residence (EIR) - EIRs are experts in a particular domain and perform due diligence on potential deals. EIRs are engaged by venture capital firms temporarily (six to 18 months) and are expected to develop and pitch startup ideas to their host firm.
- Principal - This is a mid-level investment professional position, and often considered a "partner-track" position. Principals will have been promoted from a senior associate position or who have commensurate experience in another field such as investment banking or management consulting.
- Associate - This is typically the most junior apprentice position within a venture capital firm. After a few successful years, an associate may move up to the "senior associate" position and potentially principal and beyond. Associates will often have worked for 1-2 years in another field such as investment banking or management consulting.
ORIGINS OF MODERN PRIVATE EQUITY:-
Before World War II, venture capital investments (originally known as "development capital") were primarily the domain of wealthy individuals and families.
Today true private equity investments began to emerge marked by the founding of the first two venture capital firms in 1946: American Research and Development Corporation. (ARDC) and J.H. Whitney & Company.
ARDC was founded by Georges Doriot, the "father of venture capitalism" to encourage private sector investments in businesses run by soldiers who were returning from World War II. ARDC's significance was primarily that it was the first institutional private equity investment firm that raised capital from sources other than wealthy families although it had several notable investment successes as well.
ARDC is credited with the first major venture capital success story when its 1957 investment of $70,000 in Digital Equipment Corporation (DEC) would be valued at over $355 million after the company's initial public offering in 1968.
Venture capital firms suffered a temporary downturn in 1974, when the stock market crashed and investors were naturally wary of this new kind of investment fund.
THE VENTURE CAPITAL FUNDS IN INDIA:-
The concept and origin of Venture Capital, trace its growth, and highlight the venture capital regulations. It has briefly explained about the Chandra Sekhar Committee recommendations, various types of Venture Capital Funds and the venture capital process in India. A simple case on first Venture Capital Fund in India, Technology Development & Information Company Of India Ltd., has also developed with concluding remarks.
The venture capital investment helps for the growth of innovative entrepreneurships in India. Venture capital has developed as a result of the need to provide non-conventional, risky finance to new ventures based on innovative entrepreneurship.
Venture capital is an investment in the form of equity, quasi-equity and sometimes debt - straight or conditional, made in new or untried concepts, promoted by a technically or professionally qualified entrepreneur.
Venture capital means risk capital. It refers to capital investment, both equity and debt, which carries substantial risk and uncertainties. The risk envisaged may be very high may be so high as to result in total loss or very less so as to result in high gains.
THE CONCEPT OF VENTURE CAPITAL :-
Venture capital means many things to many people. It is in fact nearly impossible to come across one single definition of the concept.
Venture capital is defined as 'providing seed, start-up and first stage financing' and also 'funding the expansion of companies that have already demonstrated their business potential but do not yet have access to the public securities market or to credit oriented institutional funding sources.
The European Venture Capital Association describes it as risk finance for entrepreneurial growth oriented companies. It is investment for the medium or long term return seeking to maximize medium or long term for both parties. It is a partnership with the entrepreneur in which the investor can add value to the company because of his knowledge, experience and contact base.
THE ORIGIN OF VENTURE CAPITAL :-
In the 1920's & 1930's, the wealthy families of and individuals investors provided the start up money for companies that would later become famous. Eastern Airlines and Xerox are the more famous ventures financed. Among the early VC funds set up, was the one by the Rockfeller Family, which started a special fund called VENROCK in 1950, to finance new technology companies. General Doriot, a professor at Harvard Business School, in 1946 set up the American Research and Development Corporation (ARD), the first firm, as opposed to a private individuals, at MIT to finance the commercial promotion of advanced technology, developed in the US Universities. ARD's approach was a classic VC in the sense that it used only equity, invested for long term, and was prepared to live with losers.
ARD's investment in Digital Equipment Corporation , 1957 was a watershed in the history of VC financing.
While in its early years venture capital may have been associated with high technology, over the years the concept has undergone a change and it implies pooled investment in unlisted companies.
MAIN ALTERNATIVES TO VENTURE CAPITAL:-
Because of the strict requirements venture capitalists have for potential investments, many entrepreneurs seek initial funding from angel investors, who may be more willing to invest in highly speculative opportunities, or may have a prior relationship with the entrepreneur.
Furthermore, many venture capital firms will only seriously evaluate an investment in a start-up otherwise unknown to them if the company can prove at least some of its claims about the technology and/or market potential for its product or services. To achieve this, or even just to avoid the dilutive effects of receiving funding before such claims are proven, many start-ups seek to self-finance until they reach a point where they can credibly approach outside capital providers such as venture capitalists or angel investors. This practice is called "bootstrapping".
In industries where assets can be securitized effectively because they reliably generate future revenue streams or have a good potential for resale in case of foreclosure, businesses may more cheaply be able to raise debt to finance their growth. Good examples would include asset-intensive extractive industries such as mining, or manufacturing industries.
Offshore funding is provided via specialist venture capital trusts which seek to utilise securitization in structuring hybrid multi market transactions via an SPV (special purpose vehicle): a corporate entity that is designed solely for the purpose of the financing.
In addition to traditional venture capital and angel networks, groups have emerged which allow groups of small investors or entrepreneurs themselves to compete in a privatized business plan competition where the group itself serves as the investor through a democratic process.
Venture capital (VC) arms of companies such as Intel, Cisco, Reliance ADAG, Google and Yahoo are increasing their investments in early stage technology and consumer service start-ups in India.
In the absence of an organised Venture Capital industry until almost 1995, individual investors and development financial institutions played the role of venture capitalists in India. Entrepreneurs have largely depended upon private placements, public offerings and lending by the financial institutions. In 1973, a committee on Development of Small and Medium Enterprises highlighted the need to foster venture capital as a source of funding new entrepreneurs and technology. Thereafter some public sector funds were set up but the activity of venture capital did not gather momentum as the thrust was on high-technology projects funded on a purely financial rather than a holistic basis.
REGULATORY GUIDELINES & FRAMEWORK:-
Later, a study was undertaken by the World Bank, to examine the possibility of developing Venture Capital in the private sector, based on which the Government of India took a policy initiative and announced guidelines for Venture Capital Funds (VCFs) in India in 1988.
However, these guidelines restricted setting up of VCFs by the banks or the financial institutions only. Thereafter, the Government of India issued guidelines in September 1995, for overseas investment in Venture Capital in India. For tax-exemption purposes, guidelines were also issued by the Central Board of Direct Taxes (CBDT) and the investments and flow of foreign currency into and out of India have been governed by the Reserve Bank of India's (RBI) requirements. Further, as a part of its mandate to regulate and to develop the Indian capital markets, the Securities and Exchange Board of India (SEBI) framed the SEBI (Venture Capital Funds) Regulations, 1996. These guidelines were further amended in April 2000 with the objective of fuelling the growth of Venture Capital activities in India.
OBJECTIVES AND VISION FOR VENTURE CAPITAL IN INDIA:-
Venture capitalists finance innovation and ideas which have potential for high growth but with inherent uncertainties. This makes it a high-risk, high return investment. Apart from finance, venture capitalists provide networking, management and marketing support as well. In the broadest sense, therefore, venture capital connotes financial as well as human capital.
In the global venture capital industry, investors and investee firms work together closely in an enabling environment that allows entrepreneurs to focus on value creating ideas and allows venture capitalists to drive the industry through ownership of the levers of control, in return for the provision of capital, skills, information and complementary resources. This very blend of risk financing and hand holding of entrepreneurs by venture capitalists creates an environment particularly suitable for knowledge and technology based enterprises.
Scientific, technology and knowledge based ideas properly supported by venture capital can be propelled into a powerful engine of economic growth and wealth creation in a sustainable manner. In various developed and developing economies venture capital has played a significant developmental role. India has the second largest English speaking scientific and technical manpower in the world.
The Indian software sector crossed the Rs 100 billion mark turnover during 1998. The sector grew 58% on a year to year basis and exports accounted for Rs 65.3 billion while the domestic market accounted for Rs 35.1 billion. Exports grew by 67% in rupee terms and 55% in US dollar terms. The strength of software professionals grew by 14% in 1997 and has crossed 1,60,000. The global software sector is expected to grow at 12% to 15% per annum for the next 5 to 7 years.
Recently, there has also been greater visibility of Indian companies in the US. Given such vast potential not only in IT and software but also in the field of service industries, biotechnology, telecommunications, media and entertainment, medical and health services and other technology based manufacturing and product development, venture capital industry can play a catalytic role to put India on the world map as a success story.
WHERE ARE VC'S INVESTING IN INDIA?
- IT and IT-enabled services
- Software Products (Mainly Enterprise-focused)
- PSU Disinvestments
- Bio Technology/Bio Informatics
- Electronic Manufacturing
ISSUES AND CHALLENGES:-
Indian Venture Capital yet to be established as a sustainable asset class among institutional investors. Moreover a limited amount of true "risk-capital" impacts entrepreneurial activity. Exit challenges exist mainly due to shallow capital markets and dull M&A environment for small companies. Most importantly, India is yet to create a brand-name for IP-led companies, like Israel has successfully done.
THE GROWTH OF VENTURE CAPITAL: A CROSS-CULTURAL COMPARISON
The venture capital (VC) industry plays an important role in nurturing entrepreneurship and innovation, and its role varies from country to country. The six countries whose VC industries are analyzed here are the United States and Canada, whose VC industries are mature; Sweden and Denmark, which have established small but successful VC industries; and Israel and Turkey, whose experiences demonstrate the state of the young VC industry in transition economies. The analysis is based on the four main determinants of the VC industry: sources of financing, institutional infrastructure, exit mechanisms, and entrepreneurship and innovation generators. In addition, the special role of VC financing in the biomaterials industry is explained. Understanding the factors that contribute to the emergence of a successful venture capital industry is important for academics, VC associations, policy-making institutions, government agencies, and investors themselves.
VENTURE CAPITAL IN INDIA:-
In India, the Venture Capital plays a vital role in the development and growth of innovative entrepreneurships. Venture Capital activity in the past was possibly done by the developmental financial institutions like IDBI, ICICI and State Financial Corporations. These institutions promoted entities in the private sector with debt as an instrument of funding. For a long time, funds raised from public were used as a source of Venture Capital. This source however depended a lot on the market vagaries. And with the minimum paid up capital requirements being raised for listing at the stock exchanges, it became difficult for smaller firms with viable projects to raise funds from public.
In India, the need for Venture Capital was recognised in the 7th five year plan and long term fiscal policy of GOI. In 1973 a committee on Development of small and medium enterprises highlighted the need to faster VC as a source of funding new entrepreneurs and technology. VC financing really started in India in 1988 with the formation of Technology Development and Information Company of India Ltd. (TDICI) - promoted by ICICI and UTI.
The first private VC fund was sponsored by Credit Capital Finance Corporation (CFC) and promoted by Bank of India, Asian Development Bank and the Commonwealth Development Corporation viz. Credit Capital Venture Fund. At the same time Gujarat Venture Finance Ltd. and APIDC Venture Capital Ltd. were started by state level financial institutions.
VENTURE CAPITAL INVESTMENTS IN INDIA:-
The venture capital investment in India till the year 2001 was continuously increased and thereby drastically reduced. It is estimated that there was a tremendous growth by almost 327 percent in 1998-99, 132 percent in 1999-00, and 40 percent in 2000-01 thereafter venture capital investors slow down their investment. Surprisingly, there was a negative growth of 4 percent in 2001-02 it was continued and a 54 percent drastic reduction was recorded in the year 2002-2003.
TYPES OF VENTURE CAPITAL FUNDS:-
Generally, there are three types of organised or institutional venture capital funds: venture capital funds set up by angel investors, that is, high net worth individual investors; venture capital subsidiaries of corporations and private venture capital firms/ funds. Venture capital subsidiaries are established by major corporations, commercial bank holding companies and other financial institutions. Venture funds in India can be classified on the basis of the type of promoters.
- VCFs promoted by the Central govt. controlled development financial institutions such as TDICI, by ICICI, Risk capital and Technology Finance Corporation Limited (RCTFC) by the Industrial Finance Corporation of India (IFCI) and Risk Capital Fund by IDBI.
- VCFs promoted by the state government-controlled development finance institutions such as Andhra Pradesh Venture Capital Limited (APVCL) by Andhra Pradesh State Finance Corporation (APSFC) and Gujarat Venture Finance Company Limited (GVCFL) by Gujarat Industrial Investment Corporation (GIIC).
- VCFs promoted by Public Sector banks such as Canfina by Canara Bank and SBI-Cap by State Bank of India.
- VCFs promoted by the foreign banks or private sector companies and financial institutions such as Indus Venture Fund, Credit Capital Venture Fund and Grindlay's India Development Fund.
VENTURE CAPITAL FUNDING:-
Venture capitalists are typically very selective in deciding what to invest in; as a rule of thumb, a fund may invest in one in four hundred opportunities presented to it. Funds are most interested in ventures with exceptionally high growth potential, as only such opportunities are likely capable of providing the financial returns and successful exit event within the required timeframe (typically 3-7 years) that venture capitalists expect.
Venture capitalists also are expected to nurture the companies in which they invest, in order to increase the likelihood of reaching an IPO stage when valuations are favorable.
Venture capitalists typically assist at four stages in the company's development:
- Idea generation;
- Ramp up; and
There are typically six stages of financing offered in Venture Capital, that correspond to these stages of a company's development.
- Seed Money: Low level financing needed to prove a new idea (Often provided by "angel investors")
- Start-up: Early stage firms that need funding for expenses associated with marketing and product development
- First-Round: Early sales and manufacturing funds
- Second-Round: Working capital for early stage companies that are selling product, but not yet turning a profit
- Third-Round: Also called Mezzanine financing, this is expansion money for a newly profitable company
- Fourth-Round: Also called bridge financing, 4th round is intended to finance the "going public" process
WHAT DO VC'S LOOK FOR?
Venture capitalists are higher risk investors and, in accepting these risks, they desire a higher return on their investment. The venture capitalist manages the risk/reward ratio by only investing in businesses which fit their investment criteria and after having completed extensive due diligence.
Venture capitalists have differing operating approaches. These differences may relate to location of the business, the size of the investment, the stage of the company, industry specialization, structure of the investment and involvement of the venture capitalists in the companies activities.
The entrepreneur should not be discouraged if one venture capitalist does not wish to proceed with an investment in the company. The rejection may not be a reflection of the quality of the business, but rather a matter of the business not fitting with the venture capitalist's particular investment criteria. Often entrepreneurs may want to ask the venture capitalist for other firms that might be interested in the investment opportunity.
VENTURE CAPITAL IS NOT SUITABLE FOR ALL BUSINESSES, AS A VENTURE CAPITALIST TYPICALLY SEEKS :
- Superior Businesses:-
Venture capitalists look for companies with superior products or services targeted at large, fast growing or untapped markets with a defensible strategic position such as intellectual property or patents.
- Quality and Depth of Management:-
Venture capitalists must be confident that the firm has the quality and depth in the management team to achieve its aspirations. Venture capitalists seldom seek managerial control, rather they want to add value to the investment where they have particular skills including fund raising, mergers and acquisitions, international marketing, product development, and networks.
- Appropriate Investment Structure:-
As well as the requirement of being an attractive business opportunity, the venture capitalist will also seek to structure a deal to produce the anticipated financial returns to investors. This includes making an investment at a reasonable price per share (valuation).
- Exit Opportunity:-
Lastly, venture capitalists look for the clear exit opportunity for their investment such as public listing or a third party acquisition of the investee company.
Once a short list of appropriate venture capitalists has been selected, the entrepreneur can proceed to identify which investors match their funding requirements. At this point, the entrepreneur should contact the venture capital firm and identify an investment manager as an initial contact point. The venture capital firm will ask prospective investee companies for information concerning the product or service, the market analysis, how the company operates, the investment required and how it is to be used, financial projections, and importantly questions about the management team.
In reality, all of the above questions should be answered in the Business Plan. Assuming the venture capitalist expresses interest in the investment opportunity, a good business plan is a pre-requisite.
METHODS OF VENTURE FINANCING:-
Venture capital is typically available in three forms in India, they are:
- Equity : All VCFs in India provide equity but generally their contribution does not exceed 49 percent of the total equity capital. Thus, the effective control and majority ownership of the firm remains with the entrepreneur. They buy shares of an enterprise with an intention to ultimately sell them off to make capital gains.
- Conditional Loan: It is repayable in the form of a royalty after the venture is able to generate sales. No interest is paid on such loans. In India, VCFs charge royalty ranging between 2 to 15 percent; actual rate depends on other factors of the venture such as gestation period, cost-flow patterns, riskiness and other factors of the enterprise.
- Income Note : It is a hybrid security which combines the features of both conventional loan and conditional loan. The entrepreneur has to pay both interest and royalty on sales, but at substantially low rates.
Other Financing Methods: A few venture capitalists, particularly in the private sector, have started introducing innovative financial securities like participating debentures, introduced by TCFC is an example.
VENTURE CAPITALISTS INVESTING IN INDIA:-
For a very long time, Silicon Valley venture capitalists only invested locally. However, throughout the years, they expanded their investments worldwide. Most recently, Matrix Partners, a leading American venture capitalist firm, had announced a $150 million India fund, where they will provide internet, mobile, media, entertainment, leisure, and travel services to customers in Mumbai. Sequoia Capital, a Silicon Valley-based VC firm, wanted to take advantage of investing in start-up companies and had acquired West bridge Capital, an Indian firm, for $350 million. It is no wonder that venture capitalist investments in India have risen dramatically within the past few years. From 2005 to 2007, VC investments in India grew from $320 million to about $777 million, respectively.
Some important Venture Capital Funds in India:-
- APIDC Venture Capital Limited , 1102, Babukhan Estate, Hyderabad 500 001
- Canbank Venture Capital Fund Limited, IInd Floor, Kareem Towers, Bangalore
- Gujarat Venture Capital Fund 1997, Ashram Road, Ahmedabad 380 009
- Industrial Venture Capital Limited, Thyagaraya Road, Chennai 600 017
- Auto Ancillary Fund Opp. Signals Enclave, New Delhi 110 010
- Gujarat Venture Capital Fund 1995 Ashram Road Ahmedabad 380 009
- Karnataka Information Technology Venture Capital Fund Cunningham Rd Bangalore
- India Auto Ancillary Fund Nariman Point, Mumbai 400 021
- Information Technology Fund, Nariman Point, Mumbai 400 021
- Tamilnadu Infotech Fund Nariman Point, Mumbai 400 021
- Orissa Venture Capital Fund Nariman Point Mumbai 400 021
- Uttar Pradesh Venture Capital Fund Nariman Point, Mumbai 400 021
- SICOM Venture Capital Fund Nariman Point Mumbai 400 021
- Punjab Infotech Venture Fund 18 Himalaya Marg, Chandigarh 160 017
- National venture fund for software and information technology industry Nariman.
DHFL VENTURE CAPITAL INDIA PVT LTD:-
DHFL Venture Capital India Pvt. Ltd. (DVCI) provides advisory, managerial and consultancy services to Venture Capital Funds, Venture Capital Managements and Venture Capital Undertakings, related to Indian Real Estate.
DVCI is promoted by Dewan Housing Finance Corporation Limited (DHFL), India's premier second largest housing finance company in the private sector.
The Company is presently providing investment management services to DHFL Venture Capital Fund. DHFL Venture Capital Fund was launched in Feb 2006, one of the first private equity Real estate funds in India. The fund is registered with Securities and Exchange Board of India.
Canaan Partners (Canaan) is a global venture capital firm focusing on investments in early stage companies in the technology and healthcare sectors.
The firm's technology group focuses on digital media, communications, enterprise software, semiconductors, and cleantech. The healthcare group focuses on biopharmaceuticals, devices, and diagnostics.
Founded in 1987, the firm has offices in Menlo Park, California; Westport, Connecticut; Gurgaon, India; and Herzliya, Israel. Since inception, Canaan has raised eight funds to date and as of 2009 manages $3 billion in capital.
Canbank Venture Capital Fund Ltd (CVCFL) is a wholly owned Subsidiary of Canara Bank. Canbank Venture Capital Fund is India's First and Only Public Sector Bank sponsored Venture Capital Fund, set up in 1989. The Fund is registered with SEBI.
Four Venture Capital Funds with an aggregate corpus of around INR 1200 Million launched till date. The portfolio investments are spread across diverse industrial segments.
A Case on Technology Development & Information Company Of India Ltd.
TDICI was incorporated in January 1988 with the support of the ICICI and the UTI. The country's first venture fund managed by the TDICI called VECAUS ( Venture Capital Units Scheme) was started with an initial corpus of Rs.20 crore and was completely committed to 37 small and medium enterprises.
The first project of the TDICI was loan and equity to a computer software company called Kale Consultants.
Present Status: At present the TDICI is administering two UTI -mobilised funds under VECAUS-I and II, totaling Rs.120 crore. the Rs.20 crore invested under the first fund, VECAUS-I, has already yielded returns totaling Rs. 16 crore to its investors.
Some of the projects financed by the TDICI are discussed below.
MASTEK , a Mumbai based software firm, in which the TDICI invested Rs.42 lakh in equity in 1989, went public just three years later, in November 1992. It showed an annual growth of 70-80 percent in the turnover.
TEMPTATION FOODS, located in PUNE, which exports frozen vegetables and fruits, went public in November 1992. The TDICI invested Rs.50 lakh in its equity.
RISHABH INSTRUMENTS of Nasik got Rs.40 lakh from the TDICI. It manufactures a range of meters used in power stations in collaboration with the ABB Metra Watt of Germany. After making cash losses totaling Rs.25 lakh in two bad years, it turned around in 1989 and showed an increase of over 70 percent in the turnover.
SYNERGY ART FOUNDATION, which runs art galleries in Mumbai and Chennai and plans to set up in Pune and Delhi too, had received Rs.25 lakh from the TDICI as convertible loans which were converted into equity on march 31, 1994. Most of this money has been used for the company's innovative art library scheme at least paintings to corporate clients.
In recent years the growth of Venture Capital Business has been drastically decreasing due to many reasons. The regulator has to liberalize the stringent policies and pave the way to the venture capital investors to park their funds in most profitable ventures. Though an attempt was also made to raise funds from the public and fund new ventures, the venture capitalists had hardly any impact on the economic scenario for the next few years. At present many investments of venture capitalists in India remain on paper as they do not have any means of exit. Appropriate changes have to be made to the existing systems in order that venture capitalists find it easier to realize their investments after holding on to them for a certain period of time.
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