• What is Venture Capital?• Background of Venture Capital

Outline :

PERUSAHAAN MODAL VENTURA

Perusahaan modal ventura (venture capital company) adalah badan usaha yang melakukan pembiayaan dalam bentuk penyertaan modal ke dalam suatu perusahaan yang menerima bantuan pembiayaan (investee company) untuk jangka waktu tertentu (pasal 1 Keppres No. 61 Tahun 1988)

KETENTUAN-KETENTUAN MODAL VENTURA

1. Keppres No. 61/1988 tentang Lembaga Pembiayaan

2. KMK No.1251/KMK.013/1998 tentang Ketentuan dan Tata Cara Pelaksanaan Lembaga Pembiayaan

3. KMK No. 469/KMK.01/1995 tentang Pendirian dan Pembinaan Usaha Modal Ventura

4. KMK No. 58/KMK.017/1999 tentang Pengawasan Kegiatan Perusahaan Modal Ventura Daerah

KARAKTERISTIK MODAL VENTURA

Penyertaan modal berjangka menengah/panjang dan bersifat sementara

Bertujuan memperoleh return atas investasinya secara maksimal melalui capital gain, bukan penghasilan berupa dividen

Dapat disertai dengan keterlibatan dalam proses pengelolaan atau pemberian bantuan teknis lainnya

Pembiayaan dilakukan berdasarkan pertimbangan kuat atau lemahnya kondisi pengelolaan perusahaan, perkembangan kegiatan usaha di masa lampau, potensi pasar dan prospek usaha, bukan atas dasar pertimbangan tersedianya kolateral yang cukup

PIHAK-PIHAK YANG TERLIBAT DALAM PEMBIAYAAN MODAL VENTURA

Perusahaan modal ventura (PMV)

Perusahaan pasangan usaha (PPU)

Perusahaan yang memperoleh pembiayaan dalam bentuk penyertaan modal dari PMV

What is venture capital?

Introduction

What is venture capital?

Venture capital is equity financing to high risk young companies (sometimes also a combination of other financing instruments)

Venture capitalists are, before everything else, after extremely high returns on investments (30-60% per annum depending on the risk)

High expected return of VCs makes it very expensive financing method for entrepreneurs

Risk is considered higher the earlier the development phase of the venture is

Types of risk financiers

Stages of VCs investment

10

VC investment & exit

InitialMeetings

PrelimnaryProjectReview byVentureCapitalist

Term SheetSigned byVentureCapitalist &Promoters

DueDiligenceReview ofProject

VentureCapitalistwith Funds

PromoterswithProject

LegalDocuments/AgreementSigned

Investmentmade byVentureCapitalistin Project

Mentoring&Monitoringof Project

Divestment& ExitfromProject

Promoters

VentureCapitalist

What a project must have?

VC looks for

What a VC does?

Each fund manager mentors only a handful of projects

While fund size is big, no. of investments cannot be too much, hence project size increases

Unlike debt/other investor, VC is not silent spectator, often is on the board of investee company

JENIS–JENIS PEMBIAYAAN MODAL VENTURA

PMV memberikan pembiayaan modal ventura kepada PPU dalam bentuk:

• Penyertaan saham: penyertaan langsung melalui pembelian saham CPPU oleh PMV. Syaratnya adalah CPPU harus sudah dalam bentuk PT atau akan menjadi PT bersamaan dengan masuknya PMV sebagai pemodal

• Obligasi konversi: CPPU menerbitkan obligasi kepada PMV dengan perjanjian akan dapat dikonversi menjadi saham pada waktu yang ditetapkan. Syaratnya adalah CPPU harus sudah dalam bentuk PT atau akan menjadi PT bersamaan dengan masuknya PMV sebagai pemodal

• Pembiayaan bagi hasil: jenis pembiayaan di mana suatu persentase tertentu dari keuntungan pada periode tertentu telah terlebih dulu disepakati. Syaratnya adalah CPPU harus sudah dalam bentuk PT atau akan menjadi PT bersamaan dengan masuknya PMV sebagai pemodal

What is venture capital?

What is venture capital?

Funds are usually : Raised from the

investors (limited partners)

By the firm (general partners)

For a set period of time (around 12 years)

Supposed to return above-average interests

By investing in private companies and exiting via IPO or buyout

Characters of venture capital Private

Professionally managed Return on investment

focused May bring network,

business advice, credibility, etc.

Corporate Manage risk Distribution networks Product R&D Operational skills Spin-outs

Academic Intellectual property Spin-outs

Government Create new jobs and

grow economy Offer cash, tax

incentives, in-kind Stem brain-drain

Angels May bring network,

business advice, credibility, etc.

Live vicariously

Venture capital triangle

Investmentopportunities

Exitopportunities

Capital ($)

RETURNS

What VC firms look for?

• Bank looks at its immediate future; influenced by historical data/experience

• VC look to its longer run future• For VC; product feature, its prospect,

its marketability financial analysis• Bankers are creditors; VC are owners• Invest in long term capital, not

interest income

What VC firms look for?

Types of VC firms

ManagementSkills

- Character- Commitment- Competence

- Capability- Completeness

(team)

Products

- Idea- Better to have:

PrototypePilot Plant

Market& Financial

Viability

- Function- Demand

- Test market- Market survey

- Financial projections

Investment assessment points by VCs

Types of deals

Category ROI (%) Probability of Making Projection

(%)

Big Winner 100 10

Winner 30 50

Sideways 10 20

Workout 0 10

Loser (50) 5

Wipeout (100) 5

Total 100

Investors’ standard

Stage of Investment Expected Return to Investor (%)

Seed capital 100

Start up 50

Second round 40

Third round 30

Bridge to public offering 25

Turnaround company 50

Leveraged buyout 35

Investment monitoring

Warning signs Late payments Loss of profits Late financial reports Poorly prepared financial

reports Large changes in balance

sheet items Major adjustment in

figures Significant changes in

management Major changes in sales

Inventory changes Lack of planning Changes in accounting

method Loss of major customer,

supplier, or lender Labor problems Changes in prices and market

share Technical change General industry decline