Established companies could tap VC funds

06 Nov 2004

1

Chennai: Not just start-ups, even existing companies could tap venture capital (VC) funds. This was stated by Sarath Naru, managing director, APIDC Venture Capital Private Limited explaining venture capital financing at The India Finance Forum (TIFF),

"Companies in existence could look at the venture capital funds for diversification programmes as it has several advantage," He said.

He said companies going in for diversification programmes or new areas could have the activity as a separate company so that the parent company's bottomline is not impacted by the increased expenditure.

Issuing `convertible preference shares' they could access VC funds. "The conversion will happen in the parent company's equity," he added.

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