Venture capital funding is increasingly becoming a common capital raising source, and is most widespread in the rapidly evolving technology.
According to Foreign Direct Investments (FDI), Venture Capital Fund’ (VCF) means a Fund registered as a ‘venture capital fund’ under SEBI (Venture Capital Funds) Regulations, 1996.
Venture Capital refers to the money provided by an outside investor to finance a new, growing, or troubled business that are believed to have long-term growth potential.
A significantly high risk is associated with the Venture Capital investment as the company’s future profits and cash flow is uncertain. Capital is invested in exchange for an equity stake in the business rather than given as a loan. Venture Capitalist may exercise some level of control, influence, or participation in the activities of the company.
Depending on the stage of investment, Venture Capital Funds are of 3 types :-
Methods of Venture Capital Financing:-
Equity :– By contributing equity capital, Venture capitalist acquires the status of an owner, and becomes entitled to a share (not more than 49% of total equity capital) in the firm’s profits as well as the losses.
Conditional Loan :– No interest is paid on Conditional loans but they are repayable to the capitalist or the lender in the form of royalty after the venture capital undertaking is able to make revenue. The royalty rate may vary from 2% to 15%, on the basis of factors such as gestation period, external risk and cash flow patterns.
Income note :- If a Venture Capitalist invests in the form of Income Note, the Venture capital firm pays both the royalty and interest but at low rates.Participating Debentures :-
The participating debenture; is an example of innovative financial securities introduced by a few Venture Capitalists.
Such security carries charges in three phases:
Start-up phase– before the venture attains operations to a minimum level, no interest is charged.
Initial Operation phase– A low rate of interest is charged in the initial level of operation.
Full Commercial Operation- Once the venture starts operating on full commercial basis, a high rate of interest is required to be paid.
Prity Khastgir IPR Strategic Indian Patent Attorney Amplify Branding
Entrepreneur*Product Strategist for YOUR IPR Business*Investor*Help #Startups to Raise Funds*Patent Geek #bigdata #Iot
Strategic Patent Lawyer Advise | TECH: #BIGDATA, Pharma, Software, Biotech, Chem, MedExpert | INDIAN Certified Mediator *Handle National Phase Patent PCT Filing in India
Helping Startups to Raise Funds & Assisting Foreign Companies to find Right Business Partner in India. Chief Strategic Officer (CSO) for your Startup IDEA. Investor incubating GREAT IDEAS and grow the startups. Assisting enterprise to enter and find RIGHT Angels, and VCs in Malaysia, Singapore, US, UK, Japan and India.
We are a niche patent consultancy & legal advisory firm based in India providing qualitative legal & technology law solutions for businesses in the Internet of Things (Iot), mobile application, pharma, biotechnology, life sciences, medical device, food tech, biomedical, chemical, healthcare, & other innovation based industries.
We are providing Patent Research services to Leading Patent Law Firms in the United States & other jurisdictions.
-Preparing & prosecuting Indian & foreign patent applications at Indian Patent Office(IPO).
-Preparation and Prosecution of Pharma l Chemical l Biotech l Medical Device Patent Applications in Indian Patent Office.
Conducting comprehensive search of unexpired patents, prior art searches, Expertise in conducting Freedom to Operate (FTO), Right to Use or Patent Clearance searches for India & worldwide / global patent market, Providing opinion on inventions in a territorial jurisdiction, Preparing patent due-diligence report, Determining potential patent barriers to the invention / product/ technology which are relevant to the commercialization of products or technologies.
Negotiating out-licensing and cross-licensing deals, Helping SMEs for commercialization of technologies in the domain of biotechnology, medical devices, stem cell, chemistry, computer, plant biotechnology, electronics business methods & health care technologies, Technology landscaping & patent portfolio management, Patent litigation at Delhi High Court, Expertise in filing pre-grant patent opposition & post-grant patent opposition at Indian Patent Office.
Determine trademark goods & classes for filing new trademark applications, Trademark watch in India, Enforcement of trademarks, Trademark Registration related procedures in India, Prosecution of trademark applications, opposition & rectification proceedings, Handling Trademark oppositions for Indian & Foreign clients, Responding to Official actions report, Trademark renewals, drafting of assignment deed.
View all posts by StartupIndia_strategist