Consider the case of Infoedge whose team, according 
to PE firm, ICICI Ventures, had the passion, vision and commitment. Finally, ICICI Ventures saw a great opportunity in the execution capability of the top managers which, it seems, had the ability to take the business proposal to a critical target and addressable market. This was reason enough for the investors. In the past, most businesses have failed because of the lack of management dynamics, rather than the market or technology reasons. This is the reason why IDFC decided to invest Rs.2.600 million, its largest-ever investment in a single firm, in Goodearth Maritime. The investor pumped in Rs.350 million in Doshion Ltd., a water-management company, because of the company’s proven technical and project-execution records.
Most PE players do take into account the investee’s historical financial performance to predict future financial projections. Agrees Sanjeev Aggarwal (MD, Investment Advisor, Helion Ventures), “PE firms are very good at making projections from past data.” The traditional form of financing, based on current business models, is no longer the order of the day since business plan keep changing by the minute and firms invariably have to scout for new things that they need to pursue to be a step ahead of their competitors. Therefore, investors today are more interested in funding companies that have proprietary technology or know-how.
According to Kalpana Jain (Senior Director, Deloitte Touche Thomastu India), other important funding-related factors include the size of investment, sector and location. Private Equity firms cater to investment opportunities, where the business has the potential for realistic growth in an expanding market and this is backed up by a well-researched and documented business plan. This is especially true after the burst of the dot.com bubble, when several venture capitalists and PE firms lost a lot of money that was invested in ideas, rather than provable growth plans. Explains Mukund Krishnawami (Founder & MD, Lighthouse Fund), “Since we lost money, we have become very skeptical.” Sharing his thoughts on this issue, Jitendra Gupta (Executive Director, Finance, Macawber Beekay) adds, “Unless a business proposition is able to offer the prospect of significant turnover growth within a stipulated time frame, it is unlikely to be of interest to a private equity firm.”
to PE firm, ICICI Ventures, had the passion, vision and commitment. Finally, ICICI Ventures saw a great opportunity in the execution capability of the top managers which, it seems, had the ability to take the business proposal to a critical target and addressable market. This was reason enough for the investors. In the past, most businesses have failed because of the lack of management dynamics, rather than the market or technology reasons. This is the reason why IDFC decided to invest Rs.2.600 million, its largest-ever investment in a single firm, in Goodearth Maritime. The investor pumped in Rs.350 million in Doshion Ltd., a water-management company, because of the company’s proven technical and project-execution records.Most PE players do take into account the investee’s historical financial performance to predict future financial projections. Agrees Sanjeev Aggarwal (MD, Investment Advisor, Helion Ventures), “PE firms are very good at making projections from past data.” The traditional form of financing, based on current business models, is no longer the order of the day since business plan keep changing by the minute and firms invariably have to scout for new things that they need to pursue to be a step ahead of their competitors. Therefore, investors today are more interested in funding companies that have proprietary technology or know-how.
According to Kalpana Jain (Senior Director, Deloitte Touche Thomastu India), other important funding-related factors include the size of investment, sector and location. Private Equity firms cater to investment opportunities, where the business has the potential for realistic growth in an expanding market and this is backed up by a well-researched and documented business plan. This is especially true after the burst of the dot.com bubble, when several venture capitalists and PE firms lost a lot of money that was invested in ideas, rather than provable growth plans. Explains Mukund Krishnawami (Founder & MD, Lighthouse Fund), “Since we lost money, we have become very skeptical.” Sharing his thoughts on this issue, Jitendra Gupta (Executive Director, Finance, Macawber Beekay) adds, “Unless a business proposition is able to offer the prospect of significant turnover growth within a stipulated time frame, it is unlikely to be of interest to a private equity firm.”
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4 comments:
great article, great work
iipm ranks 9th in course content according to recent zeebiz.com online survey
did you people know iipm overall ranking in zeebiz.com online survey is 7th
yeah i know
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