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               Securities and Exchange Board of India

limited only by their capacity to devise and develop new products.  In Israel, the companies BIRD recruit have leading-edge technological and production capabilities, are flexible and are eager to join forces with an American company in product development and commercialization.

10.4.4In practice, only 25 percent of the funded projects have been successful, but this is a satisfactory rate even for private funds.  The monies BIRD has earned on profitable projects more than offset losses made by the rest, thus allowing the Foundation to maintain the value of its corpus, BIRD approves about forty new projects a year, with average funding of $1.2 million for a duration of twelve to fifteen months.  It has so far funded five hundred such projects.

11.0AWARENESS CREATION

11.1Proper awareness of venture capital activity is important for its development.  There should be public accessibility to relevant information and data regarding venture capital activity. One immediate measure could be creation of an informed website which could have sufficient and useful data on venture capital activity.

12.0SELF REGULATORY ORGANISATION(SRO)

12.1It is also desirable that a Self Regulatory Organisation for venture capital industry in India is created.  Such organisation would help in evolution of standard practices, code of conduct, apart from generating and disseminating information about the industry.

The Committee is of the view that implementation of these recommendations would lead to creation of an enabling regulatory and institutional environment to facilitate faster growth of venture capital industry in the country.  Apart from  increasing the  domestic pool of venture capital, around US$ 10 billion are expected to be brought in by offshore investors over 3/5 years on conservative estimates. This would in turn lead to increase in the value of products and services adding upto US$100 billion to GDP by 2005.  Venture supported enterprises would convert into quality IPOs providing over all benefit and protection to the investors.  Additionally, judging from the global experience, this will result into substantial and sustainable employment generation of around  3 million jobs in skilled sector alone over next five years. Spin off effect of such activity would create other support services and further employment.  This can put India on a path of rapid economic growth and on a position of strength in global economy.

Report of K B Chandrasekhar Committee on Venture Capital41

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