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Venture Capital Financing in Biotechnology Issues and Challenges

This document outlines venture capital financing in biotechnology, including its advantages and challenges. It discusses how venture capital provides long-term funding to help companies grow. While the US and Europe are major hubs for venture capital, factors like management experience, commercialization of technology, and government policies influence venture capital financing in the Indian biotechnology industry. Key challenges include regulatory limitations and uncertainty about market success given biotechnology's long development cycles.

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56 views10 pages

Venture Capital Financing in Biotechnology Issues and Challenges

This document outlines venture capital financing in biotechnology, including its advantages and challenges. It discusses how venture capital provides long-term funding to help companies grow. While the US and Europe are major hubs for venture capital, factors like management experience, commercialization of technology, and government policies influence venture capital financing in the Indian biotechnology industry. Key challenges include regulatory limitations and uncertainty about market success given biotechnology's long development cycles.

Uploaded by

kavitajhaa
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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VENTURE CAPITAL FINANCING IN

BIOTECHNOLOGY
ISSUES AND CHALLENGES

BY
KAVITA
RADHIKA
SAINEELA
(PGDMBT)
OUTLINE
ABOUT VENTURE CAPITAL
ADVANTAGES OF VC
FINANCING IN BIOTECHNOLOGY
FACTORS INFLUENCING VFC IN
BIOTECHNOLOGY
ISSUES AND CHALLENGES
SCOPE OF VC
CONCLUSION
VENTURE CAPITAL
 Venture capital provides long-term, committed share
capital, to help unquoted companies grow and succeed.
 An entrepreneur looks to
• start-up,
• expand,
• buy-into a business,
• buy-out a business in which he works,
• turnaround or revitalize a company, venture capital
could help do this.
ROLE AND SIGNIFICANCE OF VENTURE CAPITALIST

 It injects long term equity finance which provides a solid


capital base for future growth.
 The venture capitalist is a business partner, sharing both the
risks and rewards
The venture capitalist is able to provide practical advice and
assistance to the company
The venture capitalist also has a network of contacts in many
areas that can add value to the company.
The venture capitalist may be capable of providing additional
rounds of funding should it be required to finance growth.
Venture capitalists are experienced in the process of preparing a
company for an initial public offering (IPO) of its shares onto
the stock
United states ahead of Europe and Japan as VC
availability is more there and very much encouraged
Early stage investments of VC investment in new
technology based firms contributes to 50% of costs (in
Europe)
In New Zealand VC investment is 16%
United states and Europe remain the hubs of VFC
followed by France, Israel
FINANCING IN BIOTECHNOLOGY
Government grants, technology development and
technology transfer
International grants
Angels
Venture capital
Strategic alliances
IPO, FPO
Royalty financing
Self financing
Partnerships
FUNDING

FUNDING OF BUSINESS (percentage of 100)


46

20
18
16

BANK FUNDING VC FUNDING FI'S FUNDING INTERNAL FUNDING


FACTORS INFLUENCING VC IN BT IN
INDIA
Globalization and cross border activities
Commercialization of technology
Vast pool of scientific and technical man power in
India
Government policies
ISSUES & CHALLENGES
Limitation on structuring of VCF’s
Lack of incentives to investors
Uncertainty regarding the success of the product in the
market(long gestation period)
Lack of experienced management team
Restricted scope of VC to high tech projects
 VCF is still not regarded as commercial activity
SCOPE OF VC
VC can help in the rehabilitation of sick units.
VC can assist small ancillary units to upgrade their
technologies
VCFs can play a significant role in developing
countries in the service sector including, health care
etc.
They can provide financial assistance to people
coming out of universities, technical institutes, etc thus
promoting entrepreneurial spirits

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