Scribd Logo
Upload

Welcome to Scribd!

  • 47 views

    Venture Capital Media & Entertainment

    Uploaded by

    Vinit Sonawane
    Venture capital is equity financing available for new concepts and ideas, especially in knowledge, technology, and creativity-based industries. Venture capital drives leadership in sectors like technology and creativity. Media and entertainment has the ingredients to attract venture capital, including creativity/IP and high growth potential. Venture capital comes from high-net-worth individuals, institutions, and governments. It involves investors funding a fixed-term fund managed by an asset management company. Successful investments are exited via IPO or acquisition, sharing profits between investors and managers. Media and entertainment is ideal for venture capital due to its potential for high risk and reward. India's media and entertainment sector is growing rapidly and offers tremendous opportunities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd

    Venture Capital Media & Entertainment

    Uploaded by

    Vinit Sonawane
    47 views22 pages
    Venture capital is equity financing available for new concepts and ideas, especially in knowledge, technology, and creativity-based industries. Venture capital drives leadership in sectors like technology and creativity. Media and entertainment has the ingredients to attract venture capital, including creativity/IP and high growth potential. Venture capital comes from high-net-worth individuals, institutions, and governments. It involves investors funding a fixed-term fund managed by an asset management company. Successful investments are exited via IPO or acquisition, sharing profits between investors and managers. Media and entertainment is ideal for venture capital due to its potential for high risk and reward. India's media and entertainment sector is growing rapidly and offers tremendous opportunities.

    Original Title

    March Frames Venture

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Venture capital is equity financing available for new concepts and ideas, especially in knowledge, technology, and creativity-based industries. Venture capital drives leadership in sectors like technology and creativity. Media and entertainment has the ingredients to attract venture capital, including creativity/IP and high growth potential. Venture capital comes from high-net-worth individuals, institutions, and governments. It involves investors funding a fixed-term fund managed by an asset management company. Successful investments are exited via IPO or acquisition, sharing profits between investors and managers. Media and entertainment is ideal for venture capital due to its potential for high risk and reward. India's media and entertainment sector is growing rapidly and offers tremendous opportunities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    47 views22 pages

    Venture Capital Media & Entertainment

    Uploaded by

    Vinit Sonawane
    Venture capital is equity financing available for new concepts and ideas, especially in knowledge, technology, and creativity-based industries. Venture capital drives leadership in sectors like technology and creativity. Media and entertainment has the ingredients to attract venture capital, including creativity/IP and high growth potential. Venture capital comes from high-net-worth individuals, institutions, and governments. It involves investors funding a fixed-term fund managed by an asset management company. Successful investments are exited via IPO or acquisition, sharing profits between investors and managers. Media and entertainment is ideal for venture capital due to its potential for high risk and reward. India's media and entertainment sector is growing rapidly and offers tremendous opportunities.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 22

    Venture Capital for Media & Entertainment

    Saurabh Srivastava

    Chairman - Infinity Venture Fund


    President Indian Venture Capital Association

    What is Venture Capital

    Equity Financing for new concepts & ideas - Risk Capital Available for sectors with high-growth potential

    Ideal for knowledge / technology / creativity based industries


    Vibrant Venture Capital ecosystem drives US leadership in technology, creativity Value add or SMART money

    Media & Entertainment has all the ingredients to make it attractive for Venture Capital Financing

    Who Invests in Venture Capital

    High networth individuals with appetite for high risk / reward paradigm

    Institutions diversifying investment portfolios Insurance companies, pension funds, banks, etc.
    Funds of funds

    Governments acting as catalysts

    How does the Venture Capital model work


    Investors invest money in a fund (usually a Trust) The fund has a fixed life (usually 5+2 years) Asset management company manages investments for the Trust The AMC charges the fund an annual operating cost of approx. 2.5% per annum The fund has invests in several companies which are IPOd/ acquired

    The upside is shared between the AMC and investors approx 25:75 subject to a minimum invested return

    The VC Model
    75% upside to investors
    25% of upside

    Fund

    AMC
    Opn. costs Advice

    (Trust)

    25% Upside to Fund Managers

    Co. 1

    Co. 2

    Co. 3

    Co. 4

    IPO

    SOLD

    How the Value Creation Model works


    A typical Venture Capital Fund may invest in 20 companies Typically, 10 will fail, 4 will succeed and 6 may be okay

    Venture Capital funds do not avoid risk but manage it


    By balancing the portfolio Focusing on the people and the ideas

    Mentoring, Coaching, adding value


    All new ventures are high risk Reducing perceived risk does not reduce real risk Number of failures is hard to control To balance, the ones that win must win big Hence each investment must be structured for high returns

    Fund Economics
    Fund of Rs. 110 Crore (20 Investments @ Rs. 5 crores)
    Operating Costs 10 Companies fail 03 Companies limp along 02 Companies chug along : ( - )Rs. 10 crores : ( - )Rs. 50 crores : ( - )Rs. 05 crores : ( + )Rs. 05 crores

    02 Companies do great
    02 Companies are stars TOTAL

    : ( +) Rs, 150 crores


    : ( + )Rs. 500 crores : Rs. 600 crores

    This is an IRR of 40%

    US Venture Capital Funding since 1985

    (US$Bn)

    100 90 80 70 60 50 40 30 20 10 0

    1985

    1987

    1989

    1991

    1993

    1995

    1997

    1999

    2001

    Source:

    MSDW research and Venture Source

    Asian Venture Capital Market Monitor


    USD Billion

    20 18 16 14 12 10 8 6 4 2 0 1998 $ Raised 1999 $ Invested


    Source: AVCJ

    16.6

    17.2

    9.1 7.4 4.9

    9.1 6.8 4.9

    2000

    1H-2001

    Private Equity/VC Investment in Asia - 2001


    Country Amt. Invested ($min) Number of Deals

    Japan
    India South Korea

    $1,858.38
    $1,104.90 $1,054.18

    39
    91 19

    Singapore
    Australia China Hong Kong Taiwan Malaysia Sri Lanka New Zealand Philippines

    $ 964.92
    $ 547.83 $ 393.18 $ 262.81 $ 177.24 $ $ $ $ 35.54 22.00 16.69 8.16

    26
    81 11 23 4 13 1 12 2

    Thailand
    Source : AVCJ

    7.20

    Venture Capital Investments in India

    1,600 1,400 1,200 1,000 800 600 400 200 0

    1,500 1,200 1,100

    500 20 80 150

    19 97

    19 98

    19 99

    20 00

    20 01

    20 02

    Source: IVCA/AVCJ

    20 03 *( es t)

    Venture Capital in India - The Good News

    Over 70 VC/Private Equity funds operating in India today . 90% are global funds rest Indian funds Profile of majority of VCs are Investment banking ..a few from industry Cumulative funds under management over the past 3 years : $ 5.6 billion ; over 50% is focussed on IT/Telecom

    Cumulative investments in past 3 years : $ 3 billion..


    Several New Funds Announced in year 2001 targeting India

    Venture Capital in India..a qualitative look

    Predominant sources of Capital are TIE members , Select Corporates , Singapore government entities like NSTB, GIC , Temasek, Vertex, etc
    Amongst Private Equity players Warburg Pincus, Capital International, Citibank , ING etc active . Watching on the sidelines are Morgan Stanley, J P Morgan, 3i , ..

    Large Fund of Funds like Harbour Vest, Pantheon ..still watching India
    Other investors watching India include large pension funds , University endowments

    Where is it happening?
    Funding by Investment Stages
    Late Stage 23% Seed 15%

    Expansion 18%

    Early Stage 44%

    Source: Nasscom

    Seed and Early Stage constitute 59% of current investment activity

    Private Equity Investment - By Sector


    Funding by Sector
    Manufacturing 17% Others 8% Internet 19%

    Healthcare 7%

    Source: Merill Lynch

    Information Technology 18%

    Telecom 31%

    IT & Telecom constitute 49% of current investment activity

    VC Investments in Media & Entertainment


    Ideal for Venture Capital investments Embodies Creativity, IP Potential for high Risk / Reward World Class Industry High Growth potential in all areas
    Films Television Music Radio Live Entertainment Distribution Infrastructure Content / Technology

    Huge Domestic market Globalisation has only just commenced

    Media & Entertainment Global Market Drivers


    Three principal market drivers are: Despite the recent slowdown in the US economic growth and concerns about its effects on other markets, the longterm picture for entertainment and media spending remains bright The ability of global media players to distribute their product/content throughout the world will make media companies stronger and better able to provide advertisers with effective platforms to reach consumers Digital technology and the expansion of broadband Internet access will transform virtually all entertainment and media segments by opening up new distribution outlets. The Internet will prove to be an effective companion to traditional media, rather than a feared competitor

    Investments in US

    Year
    1999-2000 2000-2001 2001-2002

    No of Investments
    254 671 480

    Value (USD)
    1.9 bn 7.7 bn 5.2 bn.

    Media & Entertainment - PE/VC Deals Done


    Films Distribution
    Shringar Films

    Broadcasting & Software


    NDTV TV 18 SAB TV Vijay TV Aaj Tak Technology Media Group Sony Entertainment Television UTV Interactive

    Media & Entertainment - PE/VC Deals Done

    Cable Television & Distribution

    Indus Ind Media

    Music

    Easy Buy Music

    Radio

    Film Software & Animation

    Pentamedia

    In the US this sector has attracted US$ 320mn in Q4 2001

    In Conclusion

    Venture Capital can transform and globalise the Indian Entertainment industry
    Bollywood, not Hollywood, could rule the roost Tremendous opportunity for Venture, Wealth & Employment Creation

    THANK

    YOU

    [email protected]

    You might also like