...PRIMER ON VENTURE CAPITAL IN MAINE . Charles J. Spies III Chief Executive Officer Timothy P. Agnew Principal Author The Finance Authority of Maine and Masthead Venture Partners would like to acknowledge and thank Governor John E. Baldacci, former Governor Angus S. King, Jr. and the Maine Legislature, who have consistently supported the efforts of Maine entrepreneurs, and the programs and services of the Finance Authority of Maine. Through their determination and support, Maine has developed perhaps the best array of programs and services for financing fledgling technology-based businesses of any state in the nation Copyright 2003 Finance Authority of Maine. All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means without the prior written permission of the Finance Authority of Maine. Finance Authority of Maine, 5 Community Drive, P.O. Box 949, Augusta, ME 04332-0949 Tel: (207) 623-3263 or (800) 228-3734 TYY: (207) 626-2717 E-mail:info@famemaine.com Web Site: www.famemaine.com April 2003 2 TABLE OF CONTENTS PAGE CHAPTER 1: CHAPTER 2: CHAPTER 3: CHAPTER 4: CHAPTER 5: CHAPTER 6: CHAPTER 7: APPENDIX A: APPENDIX B: INTRODUCTION .................................................................................. 1 WHAT VENTURE CAPITAL IS (AND IS NOT)...................................... 3 HOW VENTURE CAPITAL INVESTORS WORK ................................... 6 HOW TO APPROACH VENTURE INVESTORS...
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...e-Journal VENTURE CAPITAL IN INDIA D. P. WARNE*; PINKI INSAN** *Chaudhary Devi Lal University, Sirsa, Haryana-125055. **Shah Satnam Ji P.G. Girls College, Sirsa, Haryana- 125055. ABSTRACT India is the largest democracy on the planet and second most populous country in the world. Its extraordinary history is intimately tied to its geography. A meeting ground between the East and the West, it has been invader’s paradise. In the last one and half decades, India has proved itself as a destination for Information Technology (IT) and Business Process Outsourcing (BPO). India is also fast emerging as a major center for cutting-edge research and development (R&D) projects for global multinational companies. Lot of activities are happening in India in various sectors such as IT, BPO, Knowledge Process Outsourcing (KPO), Semiconductors, Biotechnology, Textiles, Manufacturing, and Engineering recently. This study is an attempt to explore the trends and developments in Venture Capital financing in India through an in‐depth analysis of these investments over the last 5 years (2005‐2009). INTRODUCTION The Venture capital sector is the most vibrant industry in the financial market today. Venture capital is money provided by professionals who invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors. Venture capital is an important source of equity for start-up companies. Venture capital can be visualized...
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...of joint ventures in the universal vitality division and builds up a joint endeavor model, as a business advancement and evaluation device. The joint endeavor model displays an orderly strategy that depends on present day business brainpower to evaluate a potential business wander by utilizing an adjusted score card method to screen potential accomplices, in view of their mechanical and budgetary center abilities. The model can be utilized by business improvement administrators to saddle the capability of joint dares to make monetary development and reasonable business extension. Besides, associations with nearby organizations can help to moderate econo-political hazard, and encourage purchase in from the national governments that are ordinarily the essential partners in the vitality area wanders (specifically or in a roundabout way). The specific instance of Eskom Enterprises (Pty) Ltd, a completely claimed auxiliary of Eskom, is highlighted. Table of Contents 1. BACKGROUND 4 2. INTRODUCTION 4 3. PROBLEM STATEMENT 5 4. CRITICAL ANALYSIS OF A JOINT VENTURE STRATEGY 5 4.1 What are joint ventures? 5 4.2 The elements of business strategy 6 4.3 Partnership capabilities: a value-added perspective 7 5. ALIGNING THE TECHNO-FINANCIAL STRATEGIES OF PARTNERS 8 5.1 Technology strategy 9 5.2 Financial strategy 10 5.3 The need for a strategic fit between partners 11 6. THE JOINT VENTURE MODEL (JVM). 12 6.1 RECOMMENDATION FOR THE FIRM OF JOINT VENTURE 13 PHASE...
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...The Basic Venture Capital Formula (No Dilution) This method is used to determine how much should the venture capitalist invest in a company to obtain a certain required rate of return RRI after long period of time. Example: Let us suppose that venture capitalist want to invest $10mm in company X that would not require any additional capital through 6 years and the company expect to earn $9mm dollar in year 6, and this company has commanding price / earnings (PER) equal to 22. The venture capitalist expect 60% required rate of return (RRI). Fact summary Required rate of return RRI: Investment: Term: Year 6 net income: Year 6 PER: 60% $10mm 6 $9mm 22 Required future value (investment) = (1 + IRR) years x (investment) = (1 + .6)6 x ($10mm) = $167.8 mm So the venture capitalist’s stocks value should be equal $167.8mm in year 6 to achieve 60% annual return. Total Terminal Value = PER x Terminal Net Income = 22 x $9mm = $198mm after 6 years the company as whole would worth $198mm. Final ownership required = ������������������������������������������������ ������������������������������������ ������������������������������ ������������������������������������������������������������ ������������������������������ ������������������������������������������������ ������������������������������ Final ownership required = $167.8mm / $198mm = 84.34%. The required percent ownership after 6 years should be 84.34% “and it is equal to beginning percent ownership because the company doesn’t...
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...[pic] Industry Research On VENTURE CAPITAL INDUSTRY CONTENTS |SR. NO. |CHAPTER NAME |PAGE. NO. | |1. |Industry Profile |6 | | |1.1 |Products/Service Profile, Sector classification & Nature of industry |6 | | |1.2 |Regularity environment |7 | | |1.3 |Economic environment, political and legal concerns |7 | | | | | |2. |Research Methodology |9 | | |2.1 |Population |9 | | |2.2 |Criteria for selection |9 | | |2.3 |List of companies chosen ...
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...ONSET Ventures: Written Case Submission In 1984, ONSET Ventures was established as a seed stage venture fund by Terry Opdendyk and David Kelley. With $5 million in capital, this “feeder” fund was created with the help of three later-stage venture capital firms, and investments from 31 CEOs as well as various entrepreneurs. The goal of this initial fund was to make seed stage investments that would later be backed by the larger, later-stage VC firms. During this time, Opdendyk embarked on a study of 300 separate investments from various VC firms. From this analysis, ONSET developed an investment model that allowed the firm to prosper. ONSET’s model contains six factors that help the firm locate and invest in attractive opportunities. First, a full-time mentor with both start-up and larger business experience is assigned to the portfolio company’s management team. This mentor is an independent advisor to the management team and helps the company during the incubation process. Opdendyk found that the presence of a mentor typically increased the success rate of the investment from less than 25% without a mentor to over 80% with a mentor. I agree with this element of ONSET’s model. During the start-up phase, management teams can struggle to come up with effective strategies and properly assess the risks involved. By bringing in an outside consultant in the form of a mentor, a fresh set of eyes can examine the strategy to ensure that the management team is thinking rationally about...
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...Business Venture BUS 603 What is the business? (What is the product or service?) As a teacher, my dream business is a privately owned charter school. In south Florida were I currently live, charter schools a growing and very profitable. In Miami-Dade County Charter has become a trend. The District has approved over twenty schools in the last three years. I believe this trend is just getting started and has not peaked yet. This business is one of the Entrepreneurial trends stated by Kathleen Allen. “The leading trends at the time are women-and minority-owned businesses, social responsibility, the Internet and new media, and globalization” (Allen, pg. 19). This Charter school will specialize in Law Enforcement and have a unique advantage over other schools. The Miami-Dade Charter School trusts that the supporting of change relies on the formation of a learning community were everyone has something to learn and substance to teach. The mission of the school is to develop in all kids the love of learning, and aptitude to cherish family members, friends, and the ability to engage in critical thinking, and to demonstrate widespread mastery of the academic building blocks necessary for a successful future. Who are your customers? The proposed school would serve high...
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...Since 2007 the global recession has been remarkable for all entrepreneurs, and gradually had to go looking for alternative ways to take their businesses forward. The following paper will analyze the basics that can help or hurt a company in order to become internationally succesfull, and also remark the keys to business survival with the aim of expanding its presence in emerging markets. exporting licensing joint venture equity stake/acquisition EXPORTING Pros: In developing countries it is necessary to reach an international level of quality, to upgrade machinery, raw materials and processes, based on imports needed for export. In countries with higher manufacturing costs, probably out cheaper to import than produce, thus becoming resellers, from manufacturers to retailers. In countries with free trade treaties gradual reduction of import taxes to zero, lower the cost of international purchases. Cons: Buy in another country reduces income country where the entrepreneur. Symptoms of economic problems as higher imports than exports, reduce sources of employment, output and cause national currency is exchanged for foreign currency. Imports are always implicit risk of increase in the price of foreign currency. Businesses tied to increased foreign currency for imports which are their main source of income, should contract hedging or futures brokerage firms in order to protect themselves. Imports, in high degree, dependent on the entrepreneur...
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...Venture Capitalist ENGL106-Week 2 IP American Intercontinental University Kendrick Little April 22, 2012 Abstract This is a paper to define and explain what venture capitalism is as well as what venture capitalists do in their business. Venture Capitalist An venture capitalist a person who provides capital is for the financing of growing, a new upstarting or struggling businesses. Venture capitalists are the general partners in the venture capitalist process. The capital itself provides long term finances to help companies that are not as lucrative as other large companies and it just simply keeps the company from failing. Venture capital can primarily help with a lot of things such as buying out a company, save a struggling one, upstart a new or expand an existing one. The venture capitalist profit is dependent solely on the company they have invested in, if the company is showing good signs of turnaround or having a good amount of success then the venture capitalist has made a good investment and will benefit from the success financially. Venture capitalist usually works very closely with the partner in the venture capital firm which develops a partnership. The general partners of the company role serves as the managers of the firm and will also in some cases take on the role as advisor to the vc’s to which the funds are made. In the Unites States of America venture capital firms can be set up or structured as limitied liability companies, by doing so the...
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...A joint venture is a special type of strategic alliance in that a new business entity is created that is legally separate and distinct from its parents. A primary advantage of a joint venture is that the venture can have a broader purpose, scope, and duration compared to other types of strategic alliances. Moreover, joint ventures tend to be more stable than non-joint venture strategic alliances. Joint ventures in which there is shared management or that are managed by one parent may have difficulties because there may be a tendency to try to please management from the founding companies rather than focusing on what is best for the joint venture. In contrast, non-joint venture strategic alliances are useful because they allow participants to focus on a particular project, yet do so without creating a new entity. Furthermore, non-joint venture strategic alliances can help firms overcome short-term hurdles. The basic benefits partners are likely to gain from their strategic alliances are ease of market entry, shared risk, shared knowledge and expertise, and synergy and competitive advantage. Strategic alliances can ease market entry because they allow firms to overcome barriers such as entrenched competition and hostile government regulations and/or reduce the cost of entry. Strategic alliances can also enable firms to reduce or control exposure to risk. Firms can gain knowledge and expertise via strategic alliances, as well as synergy and competitive advantage. In...
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...“Sea Venture” In 1609 the Virginia Company had a decision to make. Continue business as usual and allow the settlers in Jamestown to slowly perish, and not recoup any money for its investors, or drum up more investors and send the single largest group of settlers the New World had seen. The decision that Thomas Smythe and the Virginia Company made would lead to the settlement of a new land, and save Jamestown. In February 1609, the Virginia Company acquired a new charter for Jamestown, the Second Charter of Virginia, from King James. The new charter not only restructured the Colony in the new world, but completely restructured the Virginia Company and gave them “full and absolute power and authority, to correct, punish, pardon, govern, and rule.” The new charter granted them this power in all of Virginia, as well as the on the seas to and from the new world. The charter prohibited breaking any English law in the colony, but otherwise “they, in their good discretion, shall think to be fittest for the good of the adventurers and inhabitants there” The restructuring of Virginia was also in the new charter, it expanded the colony from 10,000 square miles to over one million square miles. The first decision made by the Virginia Company was to send Sir Thomas Gates to Virginia as Governor. Admiral George Sommers was chosen to command the fleet, and England’s most renowned Captain, Christopher Newport, would sail the lead vessel. The Virginia Company rounded up investors and...
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...Unit 5 Discussion Board Jennifer Prince Venture Capital Venture Capital is an important step for a rapidly growing company; however, you cannot get something for nothing. Venture capitalists expect something in exchange for handing over cash. Technology and life sciences are the sectors that have recently been receiving the most VC investments, which is good for our medical device product. Investment in biotechnology and medical device companies combined rose by 50% to $2.1 billion over the first quarter of 2010. (staff, 2010) Our business is one that is in a sector that VC’s will tend to back and likely experience exceptional growth and because we only get one chance to make a first impression our plan must be clear and precise. Designing a power-point presentation 20 – 30 pages long or about 90 minutes to explain the business plan, detail our medical device and our market, and explain why we have the competitive edge. The plan to use equity financing for our medical device company will simply allow us to share ownership of our business in exchange for money. Venture capitalists and angel investors are our target, as this will allow us to pay back the loan through a fixed duration of time so that we may focus on making the medical devices for the greater good of medical communities and their patients. (Go4Funding, 2010) With the help of an experienced and accredited professional legal consultant or accountant, we can obtain the necessary paperwork for developing the entire...
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...NOVEMBER SEMESTER 2013 BPNV 5103 – NEW VENTURE DEVELOPMENT INDIVIDUAL ASSIGNMENT (60%) INSTRUCTIONS AND REQUIREMENTS: Select any THREE Vietnamese companies which have failed in their business ventures in the past. Illustrate the profiles of the selected companies and find out the reasons behind their failures. Students are advised to conduct a short research on these companies to obtain sufficient information pertaining to profiles of the companies and their key reasons on why they failed in their marketplaces respectively. Sources of information can be made available from secondary data (past records of reading, newspaper, library search, internet etc.) OBJECTIVES: The assignment is designed to: 1. Determine students’ ability to access to data and various sources of information, and subsequently write the proper profile of companies. 2. Enhance and analyse students’ capability in collecting data and/or information, process, analyse and write findings or report in accordance to the questions given. QUESTIONS: a) Conduct a brief research on the THREE Vietnamese companies which have failed to sustain their presence in the market place in the past. Name them with their completed profiles respectively. (30 Marks) b) CRITICALLY discuss the key causes for their business venture failures with examples from your research and lessons learnt for future venturing entrepreneurs. ...
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...Venture Financing in India A. Sahay* Abstract Innovation is stated to be the initiating force for a new venture but venture finance is the life blood for entrepreneurship. Innovation is the fuel for igniting the Entrepreneurial engine, Venture capital revs up the engine fast till it attains sustainable speed to change the gears from idea to entity, eventually reaching IPO stage. The paper starts with Research and Development Cess Act, 1986 and covers the development in the field till 2003 and presents an analysis of venture investments as well as future prospects . The history of Venture capital (VC), its advent in India, Characteristics of VC, Government guidelines on VC, Classification of VC in India, Types of V and their analysis has been dealt in the C paper. . Introduction Since Independence till early1990s, the Government has been playing the role of an entrepreneur as well. This was on account of the policy direction which propounded socialistic society and mixed economy. There was dearth of capital, infrastructure facilities and entrepreneurship in the country. During this period, the Government developed infrastructural base such as roads, railways, electricity, ports, banks, financial institutions, insurance etc through the public sector enterprises which were supposed to attain commanding heights of the economy. The environment thus created resulted in the people of India becoming job seekers and the Government itself became a dominant entrepreneur and job provider...
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...A joint venture is a partnership or alliance among two or more businesses or organizations based on shared expertise or resources to achieve a particular goal.1 There are many good business reasons to participate in a joint venture partnering with a business that has complementary abilities and resources, such as finance, distribution channels, or technology, makes good sense. These are just some of the reasons partnerships formed by joint venture are becoming increasingly popular. A joint venture is also considered a strategic alliance between two or more individuals or entities to engage in a specific project or undertaking. Partnerships and joint ventures can be similar but in fact can have significantly different implications for those involved. A partnership usually involves a continuing, long-term business relationship, whereas a joint venture is based on a single business project. Parties enter joint ventures to gain individual benefits, usually a share of the project objective. This may be to develop a product or intellectual property rather than joint or collective profits, as is the case with a general or limited partnership. A joint venture isn’t like a general partnership; it’s not a separate legal entity. Revenues, expenses and asset ownership usually flow through the joint venture to the participants, since the joint venture itself has no legal status. Once the joint venture has met its goals the entity ceases to exist. Being a part of a joint venture has its...
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