Business Proposals Expected |
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On the question of number of business proposals expected during 2001-02, the funds appear to be in near unanimity, with more than 80% expecting the business proposals received in
2001-02 to decline. At first, this appears to be in sharp contrast to the optimism expressed with regard to number and amount of investments to be made (see below). But, if we consider the fact that in a recessionary scenario
lesser investments are going to take place in general, a lesser number of entrepreneurs coming forwards for obtaining VC funds should be normal enough. What needs answering is - how would lower proposals received lead to greater VC
investments? |
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Will Business Proposals Decrease |
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The answer could be that firstly, VCs are expecting the quality of proposals received to be better as compared to previous years and
thereby a greater proportion would be suitable for receiving investments. As one VC put it succinctly "Larger transactions, better valuation, more quality, less fluff". |
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More or Less Second Round of Funding |
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Secondly, it has been mentioned in a few of the VC responses that they would like to focus more on second round of funding to help
their projects to mature faster. At the same time, nearly three-fourths of the respondents have stated that second round of funding would take place as in the normal course and no change in focus is planned on this account.
It may be that at least some of the planned increase in investment is going to take place in this fashion. |
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