Venture capitalism theme of new business opportunities

On this episode of CNBC-TV18's show IVCA 2012 Conclave:

It’s time that private equity goes public to announce its need, significance and intentions. CNBC-TV18 showcases the importance of venture capitalist on the show IVCA 2012. "There is a financial turmoil and endless troubles in the west. On the flipside, there are endless opportunities in India. These are wanting times for a venture capitalist. How is it different from any other financial player?," said Chetan Sharma. Renuka Ramnath, MD & CEO, Multiples, says that the differences arise in the tenure of investments. Venture capitalist typically stays invested for a fairly long period. It's also a very high involvement capital. There is also a lot of focus in terms of bringing equitable treatment and returns to all stakeholders. Companies where venture capitalists are participating, the employees, entire value chain, suppliers, buyers, government, governance, everything is kept in balance. Sharma says that high risk and high return of course it's always an association with venture capitalism. Could you stay with the scope and definition? The venture ecosystem, how does it function? "There is a chain. Typically, when a company starts we are talking about what is called angel investors who come into a company right at the beginning when there is no proven business model, just a team, in many cases it is just a paper plan and the market is not proven in that sense. Effectively, the angel takes a lot of risk and when that money comes in unlike a bank to differentiate there is no collateral. It's equity shares coming in. Then subsequently VCs coming in when there is a small team. The product has been proven to some extent, on a scale of three or four at least and then some amount of customers are there, some amount of team is there and execution is more important to scale and to that extent that's a cycle which goes on. So effectively, the early part of the angel cycle could lead from anywhere up to two years of the company. Then you have the VCs coming in four, five, six years and then the big capital comes in when the team is there, the revenue model is there, business model is there, markets are proven. So, it's really scaling up what has been done repetitively many, many times more based on the past success and that's where private equity comes in. Of course there are many nuances but at each stage the earlier investor exists and there are many methods of exiting, but broadly there is a chain in place," said Sudhir Sethi, chairman and managing director, IDG Ventures. Chetan Sharma said, you spoke about stakeholders. At a time when we are looking at inclusive growth, what is the contribution of venture capitalist in terms of jobs, economic growth and the entire contribution to a sector as a whole? Renuka Ramnath, MD & CEO, Multiples, says, "The biggest contribution is risk capital generates new jobs. It's about new enterprises are scaling up existing enterprises which means enhancing the job opportunities. It also enhances the wealth creation. The investors appropriate the wealth and it gets recycled back in the economy, but also the entire value chain, as I said earlier, it's the suppliers, it's the customers, it's the employees, they all have a fairly cascading effect in terms of contribution to the economic growth." For Complete Show Watch Accompanying Videos.....