Technology Incubation & Venture Capital

8/6/2019 Technology Incubation & Venture Capital

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PRESENTED BY:

PRASHANT NAIR

ROLL NO. 28

MBA

Technology Incubation & Venture Capital



Incubation

y Incubators represent an ideal place to start a business.

y Incubators normally provide techno-preneurs with

reasonable rental rates and extend business-consulting services, networks and access to capital.



Benefits of starting a venture in an incubatory A t an incubator, there are many benefits that one could

usually enjoy. These include: Common services, including secretarial support and

shared use of office equipment and machinery; Hands-on business counseling with regards to business

planning, training in management skills, as well as accessto specialized assistance such as R&D support and

venture capital;

Networking activities among entrepreneurs inside thepremises and beyond to the local community; A ccess to venture capital and seed funding;



Features of technology incubation

y A technology incubation programme is an innovativesystem designed to assist entrepreneurs in thedevelopment of new technology-based firms, both

start-ups and fledglings.y It seeks to effectively link talent, technology, capital

and know-how to leverage entrepreneurial talent inorder to accelerate the development of new

companies and thus speed the commercialization of technology.



y The special emphasis is on providing assistancedirectly from the technology sector, relevant govt.departments and from the universities.

y

Links directly to facilities such as multimediacorridors and information super highways enhancethe benefits to new technology-oriented companies.

y A n incubator is meant to nurture young enterprisesto a level of maturity. The period of incubation

varies, from 12 months to two years, depending onthe enterprise and the speed at which the technology is to be commercialized.



y The key role of an incubator is to leverageentrepreneurship. The entrepreneur and enterpriseshould therefore, grow to a level of competency that

allows the enterprise to be established as a self-standing entity.



VENTURE C APIT A L

y Venture capital investment is defined as an activity by which investors support entrepreneurial talent with finance & business skills to exploit market

opportunities and thus obtain long term capital gainy Venture capital investment is made with the

objective of obtaining equity ownership in suchenterprises initially, and to take part in the growing

prospects in the form of capital appreciationsubsequently



FE A TURES OF VC

y New Ventures

y Continuous Involvement

y Mode of Investment

y Objective

y High Risk-return Venture

y Nature of Firms



Stages in Venture Capital Financing



1. Seed Capital: This is an early stage financing. It isthe financing of the initial product development orthe capital provided to entrepreneur to provefeasibility of the project.

2. Start-up Financing: It is the capital required tofinance the product development, initial marketing& the establishment of product facilities.

3. Early Stage Financing: finance is provided to those

companies that have completed development stageand require further funds to initiate commercialmanufacturing.



4. Follow on Financing: Provision of capital to a firm which has previously been in receipt of externalcapital but whose financial needs have

subsequently expanded.5. Expansion Financing: It is the finance provided to

fund the growth of a company which is breakingeven or trading at small profit.

6. Replacement Financing: hereby V.C. extendfinancing for the purchase of existing share from anentrepreneurs in order to reduce their holding.



7. Turnaround Financing: This is the type of financing provided by the venture capitalist in theevent of an enterprise becoming unprofitable after

the launch of commercial production.



BENEFITS OF VC FUNDS

y High-risk and High-return financing

y Focus on New Ideas

y Economic Growth

y Catalyst Role in Industrial Development

y Capital Support

y Employment Generation



VENTURE C APIT A L FUNDS IN INDI A

y VCF of IDBI 1986:

The IDBI, an apex public special anddevelopment financial institution provides venture

financing facility to new entrepreneurs. This is done by:

1. Direct venture capital assistance

2. Indirect venture capital assistance to new small &

medium-scale units, the assistance being extended by the µseed capital scheme¶



y VC FUND OF ICICI: Launched in 1986 by ICICI withthe aim of encouraging new technocrats in theprivate sector in new fields of high technology with

high inherent risk.y VC FUND of IFCI: The VC fund was started by IFCI

with the name µRisk Capital & Technology FinanceCorporation Ltd.¶ It provides finance in the form of

equity to ventures financed by conventional financialinstitutions to fill the gap in the promoter¶scontribution stipulated by such institutions.



References

y Financial Services & Markets- Dr. S Gurusamy

y www.wikipedia.com



TH A NK YOU

Technology Incubation & Venture Capital

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