SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. PROCESSESOF VENTURE FUNDING Georgebest N. Uche-E Presenting

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. INTRODUCTION $ Ventures $ Funding/Capitals $ Process $ Venture Funding $ Venture Funding Processes $ Conclusion

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. Ventures: A venture is a type of funding used for venture capital financing by which startup companies obtain investment, generally from venture capitalist and other institutional investors. The availability of venture funding is among the primary stimuli for the development of new companies and technologies. Funding/Capitals: Funding or financing is to provide capital (funds), which means money for a project, a person, a business or any other private or public institutions. Those funds can be allocated for either short term or long term purposes. Process: Process (lat. processus - movement) is a naturally occurring or designed sequence of changes of properties or attributes of an object or system.lat.

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. Venture Funding Venture Capital is financing for new businesses. In other words, money provided by investors to startup firms and small businesses with perceived, long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.  Capital investments are usually high risk, but offer the potential for above-average returns.  A Venture Capitalist (VC) is a person or corporate body who makes such investments.  Angel Investor or angel (known as a business angel in Europe), is anEurope affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. HISTORY Beginnings of modern venture capital Although many other similar investment mechanisms have existed in the past, General Georges Doriot is considered to be the father of the modern venture capital industry.Georges Doriot In 1946, Georges Doriot co-founded American Research and Development Corporation (AR&DC) with Ralph Phlanders, Karl Compton and others, the biggest success of which was Digital Equipment Corporation.American Research and Development CorporationDigital Equipment Corporation

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. Venture Funding Processes 1.Company and interested VCs find each other 2.Company makes its pitch to multiple VCs: Business plan, executive summary, financial projections with assumptions, competitive analysis 3.Interested VCs engage in due diligence: a)Technological, market, competitive, business development b)Legal and accounting

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. 4.A lead investor is identified, rest are follow-on 5.The following are negotiated: a)Company valuation b)Size of round c)Lead-investor share of round d)Terms of investment 6.Process repeats several times, builds on previous rounds Venture Funding Processes (Cont’d)

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. 1. Co. & VCs meets 2. Co. show Plans to VCs 3. VCs engage in Due Diligence 4. A lead Investor is identified 5. Both parties go into Negotiations Architectural Process

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. TIMELINE PROCESS Approximately 6 months

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. Sources of New Venture Funding Sources of New Venture Financing DevelopmentStart-upEarly GrowthRapid GrowthExit Entrepreneur Friends and Family Angel Investors Grants Strategic Partner Venture Capital Asset-based Lender Equipment Lessor Initial Public Offer Public Debt Red shading indicates primary focus of investor type. Blue shading indicates secondary focus.

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E.  Friends and family – Personal network  Angel – Personal network, Angel clubs  Super Angel – Personal network, Angel clubs  Boutique VC – Personal network, VC shows and conferences, Agent  Intermediate VC – Personal network, VC shows and conferences, Agent  Corporate VC – Industry network, Agent  Aegis Enterp. Challenge – Personal network, Angel club Contacting the Right Venture Investors

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. Sources of Funds/Capital

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. Sources of Funds/Capital(Cont’d)

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. CONCLUSION  A Venture Capital Fund means a fund established in the form of a company or trust which raises monies through loans, donations issue of securities or units as the case may be, invested in young, rapidly growing or changing companies that have the potential for high growth.  A person or body who does the above is a Venture Capitalist.  Examples of Venture Capitals are:  Family and Friends  Angel Investors  Corporate Venture Capital etc.

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E.  Venture Funding Processes are: 1.Company and interested VCs find each other 2.Company makes its pitch to multiple VCs: Business plan, executive summary, financial projections with assumptions etc 3.Interested VCs engage in due diligence: market, competitive, business development, Legal and accounting etc 4.A lead investor is identified, rest are follow-on 5.Both parties go into negotiations: Company valuation, Lead-investor share of round, Terms of investment 6.Process repeats several times, builds on previous rounds. CONCLUSION (Cont’d)

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. Q AND A SESSIONS

SCHOOL OF TELCOMMUNICATION 29th October, 2007Georgebest N. Uche-E. LIST OF FEW VENTURE CAPITALIST IN INDIA APIDC Venture Capital Limited 1102, Babukhan Estate Hyderabad Andhra Pradesh Tel: / Fax: Canbank Venture Capital Fund Limited II'nd Floor, Kareem Towers 19/5 & 19/6 Cunningham Road Bangalore Tel: / / Fax: Gujarat Venture Capital Fund st Floor Premchand House Annexe Behind Popular House Ashram Road Ahmedabad Tel: / / / Fax: Industrial Venture Capital Limited "Vairams" 112, Thyagaraya Road Post Box No Chennai Tel: / / / Fax: