Webel Venture Capital
Inspite of the recession today, the venture capitalists are still investing, the reason being the fact that now is a much less distracting time than 12 months back - lesser noise, lesser competition, and lesser irrationality. This is especially true in areas where the customer demand is unaffected - for technology-oriented businesses, this means more of consumer internet, mobile VAS, education and healthcare businesses. And perhaps less of software products and offshore services, even though specific industries there continue to do well.
Venture capital (also known as VC or Venture) is a type of private equity capital typically provided to early-stage, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or trade sale of the company. Venture capital investments, generally made by institutional investors, in exchange for shares in the invested company, are expected to bring managerial and technical expertise as well as capital to the investments. WVCL investments are usually made for new companies with limited operating history that are too small to raise capital in the public markets and are too immature to secure a bank loan or complete a debt offering. In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, they usually get significant control over company decisions, in addition to a significant portion of the company's ownership (and consequently value). Needless to say, the bar for start-ups to raise capital has gone up. Capital is more selective today than it was few months back. Besides a stricter industry selection as mentioned below, the premium on capital efficiency of businesses has gone up as a selection criterion.
Webel Venture Capital (WVCL) is engaged in making investments primarily in equity and related instruments in entities engaged in the sunrise Electronics, Telecom and Information Technology industry which also includes networking, data communication, software development, multimedia, internet services and value added telecommunication services. The main objective of WVCL is to provide financial assistance through investments, in order to assist and further the rapid growth of this industry segment, thereby enabling innovation related companies to develop and maintain a niche position in the national and international arena. The Fund aims at providing a type of private equity capital which typically delivers financial assistance to the early-stage and high potential growth companies, with the intent of generating a return through an eventual realization event. Any unlisted company ( Public / Private ) registered under the Companies Act 1956, seeking funds for projects in areas of Information Technology, Electronics, Telecommunication, Semiconductor or Nano-Technology are eligible to apply for financial support.
- Project selection process
- The Project Report is sent to IIT Kharagpur for preliminary technical appraisal
- Based on recommendation/ Reports of IIT KGP, the Project Report is placed before the Screening Committee of WVCL and the entrepreneurs is advised to give their presentation before the Screening Committee Members.
- On acceptance of the Project Proposal by Screening Committee of WVCL the Project Report is sent to the External Consultant [West Bengal Consultancy Organisation Ltd (Webcon)] for appraisal of the Project Proposal.
- Based on recommendation/ Report (for funding) by the External Consultant (Webcon), a Due Diligence exercise is done by an external expert/ consultant (appointed by WVCL).
- Thereafter the approval of MIC IT is obtained for funding the Project Proposal.
- After obtaining the approval of MIC IT, a Share Subscription & Investors Right Agreement is signed between the concerned V.C Unit and WVCL.
- After signing of the Share Subscription & Investors Right Agreement with the concerned V.C Unit and based on the projection submitted by the V.C Unit, fund is disbursed (in phases) by WVCL to the V.C. Unit.
Currently five companies have been provided funds by WVCL in areas of RFID tags with sensors, Data Leak prevention, Cellular based applications, System solution for advanced video analytics system and power factor correction. Funding is in the form of soft loans and equity. The investing cycle for most funds is generally three to five years for a business start-up, usually in exchange for convertible debt or ownership equity, after which the focus is managing and making follow-on investments in an existing portfolio. WVCL provides capital after establishing an escrow account and after conducting a post-money valuation to determine how much equity to demand in return for the finance injection to an entrepreneur. For WVCL the focus however is not only in the financing element aimed at long term capital appreciation, but also engagement, advice, coaching and everything else that goes into enabling entrepreneurship. In the final analysis, WVCL continues to energise the ecosystem by being a more effective matchmaker and guide to the aspiring talent in Bengal.