Venture Capital Funding is the' 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. The funding size varies from Rs.5 crore to Rs.50 Crore. This funding is done when a startup/entrepreneur is known in the market.
Funding provided by investors to startup firms with perceived long term growth potential. Venture capital investors invest in the new ventures which have a potential for above average market growth potential. Venture Capitalist also includes Managerial and Technical expertise . MAA Capital Solutions can help the New Entrepreneurs to find a very good Venture Capitalist.
Procedural Aspects For Venture Funding
1. A prospective client who is looking for some investors to invest in his project or new venture has to prepare a small write up of his business to be presented before the investors. He can include the following points in the said write up:Company Profile
Promoters bio data
Management and the technical team of the Company
Company’s financials for the last three years highlighting the present sales and profit figures. ( Top Line and Bottom Line)
Present additional requirements of his funds
What the Company is going to do and how it is going to invest the additional inflow of funds
Percentage of Equity/preference/any other mode of holding which the Company is going to offer to the investors
2. Once this Detailed project is prepared the same is pitched before the prospective investors
3. Prospective investors will meet the promoter of the Company person to see his
Dedication and passion for the business
His Management and technical team
New ideas if any
4. The investors have their own panel of experts who study the document and give the consent within 7 days.
5. If the decision to invest in the client’s business is positive then further discussions will take place regarding the following aspects:
Phases of investments as to how the client needs the funds , at one go or in instalments.
Exit route for the investors with a term period of 4 to 5 years
6. Finally documentation part will be affected :
Detailed shareholders agreement will be prepared which includes the details of rights and duties of the client as well as the investor.
Term sheet is prepared which includes the investment pattern as well as the exit route for the investors.
Under Seed Funding and Angel Funding the investor may appoint a Mentor from his side to help the promoter.
Under Venture Capital Funding and Private Equity, one Board seat will be given to the investor for appointing a person on his behalf.