Indian Venture Capital Association
Encyclopedia
The Indian Private Equity and Venture Capital Association was established in 1993 and is based in New Delhi
, the capital of India
. IVCA is a member based national organization that represents Venture capital
and Private equity
firms, promotes the industry within India and throughout the world and encourages investment in high growth companies. It enables the development of venture capital and private equity industry in India and to support entrepreneurial activity and innovation. The IVCA also serves as a powerful platform for investment funds to interact with each other. In 2006, the total amount of private equity and venture capital in India reached US$7.5 billion across 299 deals.
IVCA members comprise Venture capital firms
, Institutional investors
, Banks
, Business incubators
, Angel investor groups
, Financial advisers
, Accountants
, Lawyers
, Government bodies
, Academic institutions
and other service providers to the venture capital and private equity industry. Members represent most of the active venture capital and private equity firms in India. These firms provide capital for seed ventures, early stage companies, later stage expansion, and growth finance for management buy-ins/buy-outs of established companies. So far, the biggest member firm of IVCA is ICICI Ventures
which currently has a $750 million fund, and has $450 million under management.
, and State Financial corporations. Publicly raised funds were the main source of Venture Capital. This source of financing was however threatened by market fits/ vagaries and following the raising of minimum paid up capital requirements for being listed at stock exchanges, problems were in store for small firms with feasible projects.
The 7th five year plan as well as the fiscal policy
of the Government of India acknowledged the necessity for venture capital. Year 1973 also fostered venture capital as a source of funding new entrepreneurs and technology which was given by the report of the Committee on Development of small and medium entrepreneurs. The government of India, relying on the World bank’s study of the inspection of the potential of development of Venture Capital in the private sector took a policy initiative and communicated guidelines for Venture Capital Funds in 1988 but these were restrictive ; allowing the setting up of Venture Capital Funds by banks or financial institutions only.
Year 1988 marked the establishment of the Technology Development and Information Company of India Ltd. (TDICI) promoted by the ICICI and UTI (Unit Trust of India) and was immediately followed by the Gujurat Venture Finance Ltd. However, there was no significant Venture Capital activity till the mid 1990s; unfriendly policy and regulatory framework being the major reasons.
In the year 1996, Security Exchange Board of India introduced the SEBI (Foreign Venture Capital and Private Equity Funds investing in India) in order to regulate as well as facilitate Foreign Venture Capital and Private Equity Funds investing in India.
New Delhi
New Delhi is the capital city of India. It serves as the centre of the Government of India and the Government of the National Capital Territory of Delhi. New Delhi is situated within the metropolis of Delhi. It is one of the nine districts of Delhi Union Territory. The total area of the city is...
, the capital of India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. IVCA is a member based national organization that represents Venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
and Private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
firms, promotes the industry within India and throughout the world and encourages investment in high growth companies. It enables the development of venture capital and private equity industry in India and to support entrepreneurial activity and innovation. The IVCA also serves as a powerful platform for investment funds to interact with each other. In 2006, the total amount of private equity and venture capital in India reached US$7.5 billion across 299 deals.
IVCA members comprise Venture capital firms
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
, Institutional investors
Institutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
, Banks
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
, Business incubators
Business incubator
Business incubators are programs designed to accelerate the successful development of entrepreneurial companies through an array of business support resources and services, developed and orchestrated by incubator management and offered both in the incubator and through its network of contacts...
, Angel investor groups
Angel investor
An angel investor or angel is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity...
, Financial advisers
Financial adviser
A financial adviser, is a professional who renders financial services to individuals, businesses and governments. This can involve investment advice, which may include pension planning, and/or advice on life insurance and other insurances such as income protection insurance, critical illness...
, Accountants
Accountant
An accountant is a practitioner of accountancy or accounting , which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.The Big Four auditors are the largest...
, Lawyers
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
, Government bodies
Government of India
The Government of India, officially known as the Union Government, and also known as the Central Government, was established by the Constitution of India, and is the governing authority of the union of 28 states and seven union territories, collectively called the Republic of India...
, Academic institutions
Academic institution
Academic institution is an educational institution dedicated to education and research, which grants academic degrees. See also academy and university.- Types of academic institutions include :...
and other service providers to the venture capital and private equity industry. Members represent most of the active venture capital and private equity firms in India. These firms provide capital for seed ventures, early stage companies, later stage expansion, and growth finance for management buy-ins/buy-outs of established companies. So far, the biggest member firm of IVCA is ICICI Ventures
ICICI Bank
ICICI Bank Ltd. is India's second largest financial services company headquartered in Mumbai, India. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of...
which currently has a $750 million fund, and has $450 million under management.
History of Venture Capital in India
The concept of Venture capital is very recent as compared to USA, UK, Europe, Israel etc. Venture Capital functions were run by development financial institutions such as the IDBI (Industrial Development Bank of India), ICICI BankICICI Bank
ICICI Bank Ltd. is India's second largest financial services company headquartered in Mumbai, India. It offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of...
, and State Financial corporations. Publicly raised funds were the main source of Venture Capital. This source of financing was however threatened by market fits/ vagaries and following the raising of minimum paid up capital requirements for being listed at stock exchanges, problems were in store for small firms with feasible projects.
The 7th five year plan as well as the fiscal policy
Fiscal policy
In economics and political science, fiscal policy is the use of government expenditure and revenue collection to influence the economy....
of the Government of India acknowledged the necessity for venture capital. Year 1973 also fostered venture capital as a source of funding new entrepreneurs and technology which was given by the report of the Committee on Development of small and medium entrepreneurs. The government of India, relying on the World bank’s study of the inspection of the potential of development of Venture Capital in the private sector took a policy initiative and communicated guidelines for Venture Capital Funds in 1988 but these were restrictive ; allowing the setting up of Venture Capital Funds by banks or financial institutions only.
Year 1988 marked the establishment of the Technology Development and Information Company of India Ltd. (TDICI) promoted by the ICICI and UTI (Unit Trust of India) and was immediately followed by the Gujurat Venture Finance Ltd. However, there was no significant Venture Capital activity till the mid 1990s; unfriendly policy and regulatory framework being the major reasons.
In the year 1996, Security Exchange Board of India introduced the SEBI (Foreign Venture Capital and Private Equity Funds investing in India) in order to regulate as well as facilitate Foreign Venture Capital and Private Equity Funds investing in India.