Venture Capital Funding Explained by TS Darbari

In this blog, Mr. TS Darbari explains venture capital funding in India. Mr. TS Darbari says that it is important for young entrepreneurs to understand what venture capital funding is. Therefore, let’s understand in detail what is venture capital funding?
What is Venture Capital Funding?
Mr. TS Darbari says that venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups and small- to medium-sized enterprises with strong growth potential. These investments are generally characterized as very high-risk/high-return opportunities.
Venture Capital Funding in India
Mr. TS Darbari says that about 80% of VC investments in 2019 were concentrated in four sectors: consumer tech, software/SaaS, fintech, and business-to-business commerce and tech. Consumer tech continues to be the largest sector, accounting for approximately 35% of total investments, with several scale deals exceeding $150 million. Within consumer tech, verticalized e-commerce companies continued to be the largest subsegment, but in addition, there were increased investments in healthcare tech, food tech and education tech. Both SaaS and fintech attracted significant investor interest and activity throughout 2019, with several early-stage and increasingly late-stage deals.
Venture Capital Funds Explained Further by Mr. TS Darbari-
Venture capital (VC) is a type of equity financing that gives entrepreneurial or other small companies the ability to raise funding before they have begun operations or started earning revenues or profits. Venture capital funds are private equity investment vehicles that seek to invest in firms that have high-risk/high-return profiles, based on a company’s size, assets, and stage of product development.
Mr. TS Darbari further expalins that Venture capital funds are different from mutual funds and hedge funds since they focus on a very specific type of early investment. All firms that receive venture capital investments have high-growth potential, are risky, and have a long investment horizon. Venture capital funds take a more active role in their investments by providing guidance and often holding a board seat. Mr. TS Darbari says that venture capital funds, therefore, play an active and hands-on role in the management and operations of the companies in their portfolio.
Mr. TS Darbari further adds that venture capital funds have portfolio returns that tend to resemble a barbell approach to investing. Many of these funds make small bets on a wide variety of young startups, believing that at least one will achieve high growth and reward the fund with a comparatively large payout at the end. This allows the fund to mitigate the risk that some investments will fold.

Who is Mr. TS Darbari?
Mr. TS Darbari is a top management professional, with several years of rich & diversified experience in Corporate Strategy, New Business Development, Sales & Marketing, Commercial Operations, Project Management, Financial Management and Strategic Alliances.