It is very important to have research and development for new thinking, new strategy as a helpful option for getting more funds for venture capital.
Venture capital was first developed in western countries including America and Europe in the 20th century as a source of finance for enterprise. By the end of the 20th century, the development of venture capital started in India. To meet the financial needs of high-risk innovative industrial enterprises, some venture capital institutions emerged in the country and some institutions arrived from abroad.
Meaning Of Venture Capital- The word Venture Capital is made up of two words. Venture and Capital, the word venture refers to such an activity, the outcome of which is uncertain but is surrounded by the risk of loss. Capital refers to the resources required to start an enterprise. Thus, venture capital refers to the provision of resources to ventures in which there is a risk of loss. The purpose of venture capital is to provide finance for new business and also to provide finance to new early stage companies.
Features of venture capital
1. Venture capital is a long term investment. It is not refundable on demand. From this investment, the venture capital institutions get profit in the long run. (usually in 5 to 10 years)
2. This investment is mainly done in new ventures with new technology with the hope of higher profits for new production.
3. Real and active capital participation is done by direct purchase of shares and convertible securities. Its objective is to earn profit by selling that investment after the venture becomes profitable. The profit earned on such investment is treated as capital gain.
4. Venture capitalists, though involved in the management of the undertaking, cannot interfere in the day-to-day management of the undertaking. They always keep contact with the promoters only for the protection and growth of investment.
Sources of Venture Capital in India
Following are the institutional sources of venture capital:
1. All India Financial Institutions
Venture Capital division of Industrial Development Bank of India. Venture capital and technological Finance Corporation, a subsidiary company of industrial Finance Corporation of India. Fund of 20 crores created jointly by industrial credit and Investment Corporation of India and Unit Trust of India.
2. By State Finance Corporation
Venture capital Limited sponsored by Gujarat Finance Corporation (GVFL)
Andhra Pradesh Industrial Development Corporation venture capital Limited (APIDC).
3. By Banks
CAN Bank Venture Capital Fund sponsored by CAN FIN and Canara Bank.
SBI venture capital fund.
The investment fund of India sponsored by Grindlays Bank.
Infrastructure leasing sponsored by the Central Bank of India.
Any person thinks about investing in venture capital because before investing that person has to analyze whether his hard-earned capital is completely safe or not. It is an obvious fact that the risk involved in venture capital is very high. While the thinking of every ordinary person is that the plan of safe savings and investment should be accepted so that the future can be bright.
In such a situation, efforts will be made to make such a provision through new thinking, new strategy, so that no person has to pay from his earned income for investing in venture capital. Any entrepreneur will have to follow the work described in the mentioned topic for his investment.
Statutory Note
This whole plan has been carefully prepared under a new thinking, a new strategy. Even after this, if any kind of error and defect is found in the study and analysis of the subject, then no responsibility of any kind will be of the subject creator, blogger website and people related to this subject.
