Current Scenario of Venture Capital Financing In Indiaby Soniya Singh Smo And Seo For Beginners, a venture is a business or any other project that has risk associated with it. Venture capital is a type of private equity financing option that is invested in high-potential startups and venture capital firms are the organizations run by venture capitalists who take the risk of investing in startups that show huge market potential. Venture capital is not only beneficial for entrepreneurs but even the investors and the economy too benefits hugely from type of financing.
Now let’s move on to the current scenario of venture capital financing in India. India is definitely one of the most powerful countries in Asia with a fast-developing economy owing to the presence of huge talents and people to boost those talents. Although venture capital financing in India has already started spreading its roots, the industry is still in its nascent stage.
However, the present stage of the industry in India is a clear indication that there’s a lot to happen in the VC industry of India. The biggest per-requisite for the establishment of an active venture capital industry is the presence of wide varieties of financial instruments to take care of the investors’ high-risk investments. The easy availability of these instruments reduces the risks and ensure a greater return for the venture capitalists.
Over the last few years, venture capital financing in India has witnessed a significant expansion with the entry of large numbers of local and international venture capital firms. These firms have already raised billions of dollars to invest in the local start ups. The huge amount of talent, dynamic business policies and a favorable business environment are together luring the global investors too to spread their base in India and boost the entrepreneurial industry.
The investors offering venture capital financing in India are mainly targeting sectors like technology, software, enterprise software, consumer internet, online retail, healthcare, energy, advertising, real estate, infrastructure, private equity, etc. With the surge of activity in the VC industry of India, there is definitely a lot of scope for new start ups; all this while the private equity capital was solely meant for the growing and established companies and there was very less scope for the newbie’s to materialize their potential ideas.
But today, the scenario is quite different. Venture capital financing in India is open to all provided they find a unique business idea with a growing market, an efficient management team, an innovative business model and home-run potential. Once they find a start up with all the necessary items that make it ideal for an investment, the VCs waste no time to back it with an aim to gain huge profits. The success of Flipkart is no more new story and is largely because of venture capital that the firm has managed to raise. In less than 7 years, the firm has earned revenue of over $1 billion.
Venture capital financing in India not only comes with capital but also with guidance and mentor ship and of course, the strong network that is a must for every business to reach the ultimate point of success. The investors are, usually, actively involved in the invested company’s managerial affairs and also keep an eye on where the capital is being invested so as to ensure that everything goes into profit making both for the company and the VC firm.
The venture capital funds in India are of different varieties; some are backed by the central government, some by state government, some by public banks, and some by public sector organizations while some by the overseas venture capital companies. Depending on the suitability of sector, stage of development and location, the investors choose their portfolio companies in India.
If you are one of those investors looking to raise venture capital financing in India, all you need is a unique product or service, a great management team, an innovative business model, a strong value proposition to gain the confidence of the investors and a reliable referral. With all these things in the right place, it won’t be difficult for you to raise venture capital in India.
To make your search for the right investor faster, you can also consider becoming a member of an intelligent network, like Merger Alpha, that offers a common platform to entrepreneurs, buyers, sellers, financial and strategic investors and financial advisers.
For more information on venture capital financing in India, feel free to visit http://mergeralpha.com/.
Created on Mar 10th 2015 07:22. Viewed 1,554 times.