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AAVISHKAAR INDIA VENTURE FUND
A Million
Dollar Venture FUND just for you!!
We are proud to provide our Institutional members an opportunity
to create wealth through a first of its kind Micro Venture Social Fund
Join us as institutional
member today !!
The Rural Innovation Phenomenon
It is often said that "need is the mother
of all inventions." Nowhere
is this truer than in rural India where every day men and woman devise
new methods and means to ease the burdens of their daily lives. These
"rural innovations" not only improve the productivity and efficiency
of local farmers or artisans, but also have significant environmental
and social impact by developing eco-friendly "appropriate" solutions
to local problems.
The creativity of these innovators and their
innovations, however, remains confined to their immediate communities.
Another
village 100 miles away struggles with a similar problem and may only have
a sub-optimal solution, or worse still, no solution at all. The
potential of the innovations, therefore, remains untapped and the work
of the innovators unknown.
UNTAPPED OPPORTUNITIES
Despite the lack
of trickle up - from rural innovators to the broader rural population
- and trickle down - from the urban areas to the rural areas - there are
viable business opportunities to reduce waste and enhance productivity.
Indeed, there are competent people ready to exploit these opportunities.
However, the needed support to create sustainable micro ventures in the
rural areas is lacking. This leads to fewer jobs, forcing young men in
hordes to migrate to cities in search of jobs.
We firmly believe we can leverage rural innovations
and appropriate technologies to create viable and sustainable micro ventures.
This will spur economic activity, create productive jobs and improve quality
of life in rural India. The consequent purchasing power in rural India
will lead to greater rural demand for goods and services provided by corporate
India. Potentially, such a model can create a "virtuous cycle"
of sustained growth and development in India and may be replicated in
other developing countries.
Financing: The Big Bottleneck
Many government and non-government institutions
are engaged in documenting rural innovations and in developing viable
and relevant technologies; however, few resources are dedicated to nurturing
and creating micro ventures based upon these commercially viable technologies.
Along with professional expertise and mentoring, timely availability of
capital is a crucial missing ingredient.
In general, availability of funds from financial
institutions for new enterprises, particularly for small projects, is
scarce. Their high transaction costs makes such investments uneconomical.
Venture funding in India is nascent and has
thus far focused mainly on high technology and internet-based ventures;
equity investment vehicles do not consider small innovators/entrepreneurs.
Micro-finance institutions may initially support some innovations, but
the limited amount of financing available and high cost of funds does
not allow for growth of the enterprises.
STRUCTURE
AAvishkaar
International Pvt. Ltd. has been set up in Singapore, a leading financial
centre known for high standards of corporate governance. The role of AAvishkaar
International is to aggregate individual contributions and remit the funds
to AAvishkaar India Micro Venture Capital Fund under a single FIPB approval.
Aavishkaar India Micro Venture Capital Fund
(AIMVCF), based in Ahmedabad will provide timely appropriate financing,
management support and professional expertise to promising micro ventures.
Consistent with social development objectives, the fund would accord priority
to projects with limited or no access to established institutions. AIMVCF
will be established as a venture fund in conformity with Securities and
Exchange Board of India (SEBI) regulations and has been registered as
a Trust under the Indian Trust Act.
A CREAM TEAM IN PLACE
Initially, AAvishkaar India
Micro Venture Capital Fund has two trustees; both the initial trustees
represent AAvishkaar International and have exceptional professional credentials
and track record. Mr. Nilesh Mehta, [39, an alumnus of IIM Ahmedabad &
Managing Director of eIndiaVenture Fund] and Mr. Arun Diaz, [50, an alumnus
of XLRI and a career international banker] are based in Mumbai, India.
The Board of Trustees will
appoint and delegate day-to-day management and investment approval to
a Management Board led by a Chief Executive Officer. The CEO's role will
be filled by early 2002. The current Management Board includes Mr. Vineet
Rai, Prof. P Sudarsan, Ms. Jennifer Meehan and Dr. Anantha-Nageswaran
and Prof. Krithivasan Ramamirtham; Mr. Arun Diaz and Mr. Nilesh Mehta
will represent trustees on the Management Board.
· Mr. Vineet Rai, Executive
Director: Based in Ahmedabad, Mr. Rai, was the CEO of the Gujarat Grassroots
Innovations Augmentation Network (GIAN) - a Government of Gujarat sponsored
incubator for traditional knowledge based innovations. Mr Rai holds a
Post-Graduate diploma in Forestry Management from Indian Institute of
Forest Management, Bhopal. He will be responsible for overall management
of the fund, pending the appointment of a full time CEO.
· Ms. Jennifer Meehan. Based
in Tokyo, Ms. Meehan left a successful career with Chase Manhattan Bank
in 1998 to pursue her strong commitment to social development; she has
since been active in micro-finance throughout Asia, with a particular
emphasis on India. She will play a key role in designing and implementing
an effective investment policy and operational framework at AAvishkaar.
· Ms. Anagha Mitra, Programme
Manager. Based in Ahmedabad, Ms. Mitra recently completed her Masters
from London School of Economics and has worked with the Ford Foundation
and Oxfam. Ms. Mitra will be responsible for project analysis and evaluation
and administrative tasks.
MODE OF FINANCING:
In 2002, AIMVCF will seek to invest in
micro ventures
within the following guidelines:
Projects
must be socially relevant and commercially viable with total outlay of
up to US$100,000 (S$180,000) and which do not have access to traditional
finances.
As
a general guideline, our total exposure will be limited to 49% of the
total project size or US$50,000 (S$ 90,000), whichever is lower.
Two types of financing will be offered:
· Equity: 49 % of required equity or US$ 50,000,
whichever is lower; target exit in 3-5 years; investment return hurdle
rate of 20% will be applied in evaluation. In most cases, entrepreneurs
will buy out our share from retained earnings or refinance from traditional
sources of funding as ventures grow in size. IPO route to exit will be
rare.
·
· Bridge Financing: debt or quasi-equity (if
equity exposure is less than USD50,000); term less than 1 year and priced
according to prevailing market rates. These facilities will typically
fund peak working capital requirements.
A diversified portfolio will be achieved by
limiting the maximum investment in any one project or projects to 20%
of the corpus fund. AAvishkaar India will adopt clearly defined investment
procedures and guidelines. Please note that AIMVF is the first fund of
its kind in the world. Some
of these guidelines may change based on actual experience.
How to reach us:
Aavishkaar India fund is proud to form alliance
and become an institutional member of "Network of Indian Environment
Professionals " to solicit world class proposals and innovation ideas
from NIEP's primary and institutional members.
If you are a member of Network of Indian Environment
Professionals , write to us at proposal@envindia.com
for help in writing project proposals and submitting your innovative idea.
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