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Venture Capital Company

Compilation of documents for Company Registration with MCA.
End to End Assistance for Promoters in Venture Capital Company Registration.
Submission of application with necessary documents to obtain the SEBI License.
Consultations in creating an investment strategy.
Legal advisory and post-registration support related to compliance from experts.

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    Inventors having huge funds like to invest seeing their long-term benefit in start-up companies that have potential to grow but lack in investments. The capital invested is known as ‘Venture Capital’ and such investors are termed as ‘Venture Capitalists’.

    The interesting thing is return on investment depend on the growth of the company and hence are highly risky in nature. In turn, venture capitalists also have the power to influence major decisions of the company they are investing in.

    What is ‘Venture Capital Company’?

    A Venture Capital Company can be termed as group of investors who play the role of intermediary. In other words, who take money from Venture Capitalists and invest that money (venture capital) in riskier firms/ start-ups (where a traditional banks are unwilling to invest). As the investments are risky, the companies usually charges a higher rate of interest from the businesses. Higher the risk, higher the interest.

    Registration of ‘Venture Capital Company’:

    How to apply?

    An application for grant of registration certificate shall be made to the Board in form A along with a non-refundable fee (Application fee- 1000000).
    Board may issue directions for transfer of records, documents or securities of disposal of investments related to VC activities.
    On the intimation is received, the application shall pay registration fee (Registration fee-1000000) as instructed.
    Once the fees is received, the Board may grant a certificate of registration in Form B.

    Eligibility criteria:

    Common Criteria:

    Should be proper and fit.
    Not be involved in litigation with the Securities Market or be convicted of any offense which involves moral turpitude.

    Specific Criteria:

    For a company:

    Venture Capital Fund must be reflected in MOA.
    MOA and AOA should prohibit public to subscribe to its securities.
    For a trust:
    The main objective should be to carry the activities as VC Fund.
    The instrument should be in form of deed and be registered under Indian Registration Act, 1908.
    For a body Corporate:
    Set under the central/state legislature.
    Applicant must not be refused certificate earlier.
    Minimum Investment Criteria:
    A VC can raise funds from any investor whether Indian, Foreign or Non-Resident Indian.
    No VC Fund either company or trust shall accept any investment from any investor which is less than 5 lakhs rupees.
    The scheme launched shall have a commitment from the investors for the contribution of an amount of at least 5 Cr.
    Document Required

    Documents To Be Filled With SEBI

    Information Memorandum
    Placement Memorandum (Copy)
    Contribution/Subscription Agreement (Copy)
    Report of Money Collected

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      How does ‘Venture Capital Company’ works?

      Any venture capital company works under certain specific investment profile. The investment profile is a document which illustrates types of businesses to invest.

      Now even an investor puts his money in the firm, the company in return puts his money to the funds. The fund is then invested in group of companies ( start ups) with expectation to get their return back in period of 3 to 7 years. Once the company gets their money back, the pay back to the investors along with interest. The investors can also be repaid as shares of the stock of the startups. In between all these activities, the company keeps a portion of the money as their commission.

       

      Alternately Call our Legal Expert Now For Free Consultation at 09599653306

      Frequently Asked Questions on Venture Capital Company

      The most probable time is 3 to 6 months before a start-up think it would actually be required.

      Not all businesses are suitable for venture capital, only those who are in their budding stage and have tremendous potential to grow in future.

      Venture Capital Investment can be grouped in different stages depending upon the maturity of the businesses, stages are :

      • Seed
      • Start-up
      • Other early stage
      • Late Stage venture
      • Expansion

      Compare your Options
      Particulars VC Fund Angel Fund
      Type of Equity Private Private
      Amount Invested Large Small
      Type Company/Business Individuals
      Decision Making Committee Self
      Who Invests the money Venture Capitalists Mostly the fund
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