Entrepreneurship 4 Marks Question

1. Venture Capitalist.
2. Venture capital is a type of private equity capital provided as seed funding to early-stage, high potential, high risk, growth up companies/entrepreneurs who lack the necessary experience and funds to give shape to their ideas.

Features of venture – capital:

1. It is basically equity finance in relatively new companies.
2. It is long-term investment in growth-oriented small or medium firms.
3. Venture capitalist not only provide capital but also business skills to investee firms.
4. It involves high risk-return spectrum.
5. It is a subset of private equity.
6. The venture capital institutions have a continuous involvement in the business after making the investment.
7. Such institutions disinvest the holdings either to the promoters or in the market.

1. The Tourism Finance Corporation of India (TFCI) was born as a result of the Government of India's decision, in 1987, to promote a separate all-India financial institution for providing financial assistance to tourism-related activities/ projects.
2. It was incorporated as a public limited company under the Companies Act, 1956 on 27 January, 1989 and became operational with effect from 1 February, 1989.
3. TFCI provides financial assistance to enterprises for setting up or the development of tourism-related projects, facilities and services such as hotels, restaurants, holiday resorts, amusement parks, entertainment centres, education and sports, rope ways, cultural centres, convention halls, transport, travel and tour operating agencies, air services, tourism emporia and sports facilities.
4. Value which Neeraj wants to provide job opportunity to the villagers in order to improve their standard of living.

Four Functions of Industrial Development Bank of India are:

1. Direct Financing.
2. Guaranteeing for loans.
3. Refinancing.
4. Acceptance and discounting of bills.
5. Direct Subscriptions and underwriting of securities.
6. Undertake market and investment research and surveys.
7. To provide technical and administrative assistance for the promotion and points expansion of industry.

1. The Tourism Finance Corporation of India (TFCI) was born as a result of the Government of India's decision, in 1987, to promote a separate all-India financial institution for providing financial assistance to tourism-related activities/ projects.
2. It was incorporated as a public limited company under the Companies Act, 1956 on 27 January, 1989 and became operational with effect from 1 February, 1989.
3. TFCI provides financial assistance to enterprises for setting up or the development of tourism-related projects, facilities and services such as hotels, restaurants, holiday resorts, amusement parks, entertainment centres, education and sports, rope ways, cultural centres, convention halls, transport, travel and tour operating agencies, air services, tourism emporia and sports facilities.
4. Value which Nitin wants to provide job opportunity to the villagers in order to improve their standard of living.

1. Specialised Financial Institutions.
2. Establishing of SFIs facilitated:

1. Provision of sufficient long-term funds in the desired sectors in accordance with planned priorities to the industrial units and entrepreneurs.
2. New and small entrepreneurs in setting up industry.
3. Development of (i) small scale industry and (ii) projects in backward areas.
4. Provision of technical and managerial advice to the entrepreneurs, facilitating thus, in identification, evaluation and execution of new investment enterprises.
5. Underwriting of and direct subscription to the issue of shares and debentures in the capital market of the upcoming ventures.
6. Establishment of enterprises which require extra-ordinarily large amount of finance for their projects with a long-gestation period.

He should contact NABARD for this purpose.Functions of NABARD are:

1. NABARD is empowered to undertake inspection of RRBs and Cooperative Banks, other than the Primary Cooperative Banks.
2. To open a new branch, a recommend dation of NABARD is imperative by RRBs or Cooperative Banks to seek permission from RBI.
3. RRBs and Cooperative Banks, along with RBI, are required to file returns and documents with NABARD.

The various limitations/ obligations are as follows:

1. Increasing accountability to public shareholders.
2. Need to maintain dividend and profit growth trends.
3. Becoming more vulnerable to an unwelcome takeover.
4. Need to observe and adhere strictly to the rules and regulations by governing bodies.
5. Increasing costs in complying with higher level of reporting requirements.
6. Relinquishing some control of the company following the public offering.
7. Suffering a loss of privacy as a result of media interest.

Advantages of Franchising:

1. Proven idea: Business is based on a proven idea. Success of the product can be checked in the market.
2. Profit from brand recognition: Franchises develop an image in the marketplace. This saves both time and money of advertising, promotion, recognition, etc. Image of the product is a favourable one and is in the minds of consumers.
3. Recognized brand name and trademarks: Entrepreneur gets a recognized brand name and trademarks. Benefit from any advertising or promotion by the parent company automatically benefits the franchise.
4. Support from parent company: The franchisor gives support in the form of training, help setting up the business, a manual telling how to run the business and ongoing advice.
5. Exclusive rights of the territory: The franchisor can't sell any other franchises in the same territory which leads to the creation of monopoly power in the territory.
6. Easier Financing: Financing the business becomes easier due to the associated brand name. Banks are more likely to lend money to buy a franchise with a good reputation.

The State Financial Corporation (SFC) can provide him a lon for 10 years. Functions of SFC:

1. Grant of loans and advances to or subscribe to debentures of, industrial concerns repayable within a period not exceeding 20 years.
2. Guaranteeing deferred payments due from an industrial concern for purchase of capital goods in India.
3. Underwriting of the issue of stock, bonds or debentures by industrial concerns.
4. Subscribing to, or purchasing of, the stock, shares, bonds or debentures of an industrial concern subject to a maximum of 30 per cent of the subscribed capital, or 30 per cent of paid up share capital and free reserve, whichever is less.
5. Act as agent of the Capital government, State government, IDBI, IFCI or any other financial institution in the matter of grant of loan or business of IDBI, IFCI or financial institution.

Small Industries Development Bank of India (SIDBI) was established in April 1990 as a wholly owned subsidiary of IDBI under the SIDBI Act, 1990 with the following objectives in mind:

1. Initiating technology upgradation and/or modernisation of existing units.
2. Expanding channels for marketing SSI sector products in national and international markets.
3. Promoting employment oriented industries.

SIDBI directly assists the small scale industries through the following schemes:

1. Project Finance Schemen.
2. Equipment Finance Scheme.
3. Marketing Scheme.
4. Technology Upgradation Scheme.
5. Venture Capital Scheme.

While there are benefits to going public, it also means additional obligations and reporting requirements such as:

1. Increasing accountability to public shareholders.
2. Need to maintain dividend and profit growth trends.
3. Becoming more vulnerable to an unwelcome takeover.
4. Need to observe and adhere strictly to the rules and regulations by governing bodies.
5. Increasing costs in complying with higher level of reporting requirements.
6. Relinquishing some control of the company following the public offering.
7. Suffering a loss of privacy as a result of media interest.

Venture capital finance has the following features:

1. Equity: It is equity finance in relatively new ventures and new companies.
2. Long term: It is long-term investment in growth-oriented small or medium firms.
3. Skills: Venture capitalist also business skills to investee firms. This raises the chances of success of the emerging firm.
4. Risk: It involves high risk-return spectrum.
5. Private equity: It is a subset of private equity.
6. Involvement: The venture capital institutions make a continuous involvement in the business.

The importance of a stock exchange from the viewpoint of society:

1. Rapid capital formation:

1. Many people save their money and are ready to invest where they can get high rate of returns, when they check with the good companies with high premium amount they tempted to invest in securities.
2. This habit leads to investment of savings in corporate and government securities.
3. The high returns of dividend from these securities may further be invested in buying more securities.
4. This flow of funds leads to rapid and continuous capital formation.

2. Economic development:

1. It is the market in which existing securities are purchased and sold.
2. This process is called as disinvestment and reinvestment.
3. Through easy funds mobilisation, this leads to more capital, enhancing economic development of the country.

3. National projects: As stock exchange promotes, the capital formation by rating and approving the projects which brings national prosperity can be easily undertaken.

Value Points:

• National prosperity.
• This habit leads to investment of savings in corporate and government securities.
• Easy funds mobilizing.
• Enhancing economic development.
• Promoting the people to come with platform to buy and sell the securities.
• Readiness to cooperate.

From the investor’s point of view:

1. Dissemination of useful Information: It publishes useful information regarding price lists, quotations, etc., of securities through newspapers and journals.
2. Ready Market: It will be easy way platform for all those for buying and selling shares and convert it into cash through a member of stock exchange.
3. Investors’ Interests Protected: Stock exchanges formulate rules and regulations so that members may not exploit the investors.
4. Genuine guidance about the securities listed: The investors can safely depend upon the information provided by the stock exchanges.
5. Barriers of distance removed: Stock exchange removes the barriers of distance with regard to securities listed there.
6. Knowledge of profit or loss on investments: The investors can estimate the profit or loss on the total amount of investments in securities, by comparing the original amount invested and the price of securities on a particular day.

Surjeet can avail finance through angel investors.

Tourism Finance Corporation of India (TFCI), which funds tourism related projects in India, is playing a vital role in the development of entrepreneurship in the country by funding large as well as small entrepreneurial projects in India. Apart from fulfilling the needs of already established hoteliers, TFCI is also funding professional who want to branch out and become entrepreneurs through the set-up of small, medium or large tourism and hospitality related projects.
The following project-related services are provided by TFCI for new entrepreneurs for a successful venture.
Project-related Services:

1. Site evaluation studies.
2. Market-potential assessment for tourism projects.
3. Techno-economic feasibility studies.
4. Loan/ Equity syndication services.
5. Financial restructuring of project proposals, review and appraisal.
6. Project implementation and monitoring services.
7. Pre-opening technical and facility planning services.
8. Property evaluation including determination of terms for transfer/ lease, preparation of related RFQ and RFP and transfer/ lease documents, etc.
9. Other project related services include assistance in finalisation of arrangements for lease/ transfer of management, franchise tie-ups, selection of design/ project/ architectural consultants, etc.

1. SEBI was officially established by The Government of India in the year 1988 and given statutory powers in 1992 with SEBI Act, 1992 being passed by the Indian Parliament.
2. SEBI has it's Headquarter at the business district of Bandra Kurla Complex in Mumbai, and has Northern, Eastern, Southern and Western Regional Offices in New Delhi, Kolkata, Chennai and Ahmedabad respectively.
3. Initially, SEBI was a non-statutory body without any statutory power. However, in the year of 1995, SEBI was given additional statutory powers by the Government of India through an amendment to the Securities and Exchange Board of India Act, 1992. In April, 1998 the SEBI was constituted as the regulator of capital markets in India under a resolution of the Government of India.

SEBI's Establishment: SEBI was established as a supervising and regulatory body to curb certain malpractices and to promote the Securities Markets in India.

Entrepreneurs can typically seek venture capital to assist at any of the following four stages in the company's development.
i. Early stage financing

1. Seed capital finance: It refers to the capital required by an entrepreneur for conducting research at precommercialization stage. During this stage, the entrepreneur has to convince the investor (VC) why his idea/product is worthwhile. The investor will investigate into the technical and the economical feasibility of the idea. In some cases, there is some sort of prototype of the idea/product that is not fully developed or tested. As the risk element at this stage is very high, investor (VC) may deny to assist if he does not see any potential in the idea.
2. Start up finance: If the idea/product/process is qualified for further investigation and/or investment, the process will go to the second stage; this is also called the start-up stage. A business plan is presented by the entrepreneur to the VC firm. A management team is being formed to run the venture. While the organisation is being set up, the idea/product gets its form. The prototype is being developed and fully tested.
3. Second-round financing: At this stage, the time comes the idea has been transformed into a product and is being produced and sold. This is the first encounter with the rest of the market, the competitors and attempt is to squeeze in the market and get some market share from the competitors.The entrepreneur, at this stage, needs assistance from the Venture Capitalist for expansion, modernization, diversification so that the economies of scale and stability could be attained.

ii. Last stage financing /bridge /pre-public stage: In general, this is the last stage of the venture capital financing process. The main goal of this stage is for the venture to go public so that investors can exit the venture with a profit commensurate with the risk they have taken.
At this stage, the venture achieves a certain amount of market share. This gives the venture some opportunities for example:

• Merger with other companies
• Keeping new competitors away from the market
• Eliminate competitors
• Development capital

Meaning of Public Issues: This involves raising of funds directly from the public through the issue of prospectus. When an entrepreneur decides to go public and become a public company, he/ she tends to be in advantageous position because of reaping the following benefits:
Access to capital or raising funds:

1. An entrepreneur stands to gain by going public in access to capital.
2. Generally, the capital is paid off at the liquidation of a company or not to be repaid immediately and does not involve an interest charge.
3. The only reward the IPO investors seek is an appreciation of their.

investment by getting dividends. Entrepreneur can use the capital raised for a variety of purposes including

1. growth and expansion.
2. retiring existing debt.
3. corporate marketing and development.
4. cquisition capital.

Other advantages:

1. Mergers and acquisitions: Public stock of a company can be used for businesses to grow through acquisitions.
2. Highervaluations: Publiccompanies are typically valued more than private companies.
3. Benchmark trading price: The trading price of a public company's stock serves as a benchmark of the offer price of other securities.
4. Capital formation: Raising capital later is typically easier because of the extra liquidity for the investors.
5. Incentives: Stock options and stock incentives can be very helpful in attracting employees.
6. Reduced business requirements: Se While an underwritten initial public offering requires significant earnings, the lack of earnings does not keep a private company from going public.
7. Less dilution: There is less dilution of ownership control compared to an IPO. Ent.
8. Liquidity: A public company provides liquidity for management, minority shareholders, and investors.
9. Prestige: Added prestige and visibility with customers, suppliers, HEA as well as the financial community.

Before deciding right or wrong conduct of a chief accountant let us understand what is interim dividend, role of a chief accountant, his conduct for his benefit and affected social values.

1. Interim dividends are dividend payments made before a company’s Annual General Meeting (AGM) and final financial statements. This declared dividend usually accompanies the company’s interim financial statements.
2. As a chief accountant of a company he should not disclose confidential information which might be acquired in course of his work during the meeting time and he should not even use such information for his personal gain or gain for others.
3. The above case study is concerned with unethical behaviour done by the chief accountant.
4. Affected social values are trust, honesty, duty, loyalty and truthfulness.

Differences between ICICI and SIDBI are:

S.No.	Basis	Industrial Credit and Investment Corporation of India (CICI)	Small Industries Development Bank of India (SIDBI)
1.	Mode of establishment	ICICI was established as a joint stock company in the private sector in 1955.	SIDBI was established in April 1990, as a wholly owned subsidiary of IDBI, under the SIDBI Act, 1990.
2.	Objective	To assist in the formation, expansion and modernisation of industrial units in the private sector. To stimulate and promote the en participation of private capital. To furnish technical and managerial aid.	Initiate steps for technological upgradation and modernisation of existing units. Expand channels for marketing of SSI sector products in India and abroad. Promote employment-oriented Industries.
3.	Types of assistance provided	It provides only direct assistance.	It provides direct as well as indirect assistance

Forms of assistance provided by SIDBI to industries are as follows:

1. Direct Assistance Schemes: (SIDBI directly assists SSI).

1. For Project Finance Scheme.
2. Equipment Finance Scheme.
3. Marketing Scheme.
4. Vendor Development Scheme.
5. Infrastructure Development.
6. ISO-9000 Certification.
7. Technology Upgradation.
8. Venture Capital Scheme.
9. Assistance for leasing to NBFCS, SFCS, SIDCS.
10. Resource support to institutions involved in development and financing of small scale sector.

2. Indirect Assistance Schemes: Under its indirect schemes, SIDBI extends refinance of loans to small sector by primary blending institutions. At present, such refinance is extended to 892 PLis.

The financial assistance of SIDBI to the small scale sector is channelised through the following two routes:

1. Indirect Assistance: Under its indirect schemes, SIDBI extends refinance of loans to small scale sector by Primary Lending Institutions (PLIs) viz. SFCs, SIDCs and Banks. At present, such refinance assistance is extended to 892 PLIs and these PLIs extend credit through a net work of more than 65,000 branches all over the country. All the Schemes of SIDBI both direct and indirect assistance are in operation in all the States of the country through 39 regional/branch offices of SIDBI.
2. Direct Assistance: SIDBI directly assists SSIs under:

• Project Finance Scheme.
• Equipment Finance Scheme.
• Marketing Scheme.
• Vendor Development Scheme.
• Infrastructural Development Scheme.
• ISO-9000.
• Technology Development & Modernisation Fund.

From the viewpoint of investors

1. Dissemination of useful information:

1. Stock exchange publishes useful information regarding price lists, quotations, etc., of securities through newspapers and journals.
2. All the shareholders who wish to buy and sell their securities accordingly use the provided information.

2. Ready market: It gives a ready market for the security holders, so that all those who wish and are in need of money can easily convert their shares into cash online or through intermediaries.
3. Investors' interests protected: Stock exchanges formulate rules and regulations so that members may not exploit the investors.
4. Genuine guidance about the securities listed: The investors can safely depend upon the information provided by the stock exchanges.
5. Barriers of distance removed:

1. Stock exchange removes the barriers of distance with regard to securities listed there.
2. Without listing the shares in stock exchange the securities can be sold out in a limited market only.

5. Knowledge of profit or loss on investments: The investors can estimate the profit or loss on the total amount of investments in securities, by comparing the original amount invested and the price of securities on a particular day. Value points:

• Sharing the information.
• Helpfulness.
• Quest for knowledge.
• Discipline in following rules and regulations.
• Resourcefulness.
• Equality for all regarding the brokerage.
• Team spirit.
• Universal.
• Shareholders shows the spirit of enquiry.

Three central level financing institutions are IFCI, IDBI and ICICI.

1. IFCI: Industrial Finance Corporation of India (IFCI) was established in 1948 under the IFCI Act, 1948. The main objectives of the corporation is to provide medium and long-term credit to all industrial concerns in India.
2. IDBI: The Industrial Development Bank of India (IDBI) was established under the Industrial Development Bank of India Act, 1964 as a wholly owned subsidiary of the RBI. The ownership of IDBI has since been transferred to central government from 1976. The main objective of establishing IDBI was to set-up an apex institution to co-ordinate the activities of other financial institutions and to act as a reservoir on which the other financial institutions can depend.
3. ICICI: Industiral Credit and Investment Corporation of India (ICICI) was established as a joint stock company in the private sector in 1955. The major contributors towards its share capital are banks, insurance companies, foreign financial institutions and the world bank.

S.No.	Basis	Venture capital	Loan
1.	Meaning	Venture capital is a type of private equity capital as seed funding to high potential, high-risk companies.	With a loan, a lender gives a business money and the business has a contractual obligation to pay back that amount plus interest over some period of time.
2.	Form of returns	Dividends	Interest
3.	Security	No security is offered.	Security is generally offered.

Harsh should contact SIDBI for financial assistance in opening his innovative venture. Features of SIDBI are:

1. The financial assistance of SIDBI to the small scale sector is channelized through the following two routes:

2. Indirect Assistance
3. Direct Assistance

2. It stimulate and promote the participation of private capital (Indian) in such industrial units.
3. SIDBI has taken overthe responsibility of administering following two funds which were previously administered by IDBI i.e.

1. Small Industries Development Fund.
2. Small Industries Development Assistance Fund.

4. SIDBI's financial assistance to SSS is primarily channelised through the existing credit delivery system consisting of commercial banks, co operative banks, RRBs and SFCs.
5. Refinance loans and advances extended by the primary lending institutions to small scale industrial units, alongwith providing them even resource support.
6. Discounts and rediscounts bills arising from sale of machinery to or its manufacture by industrial units in the small-scale sector.

Industrial units which face difficulty in procuring finance from traditional sources because of the risk associated with them are:

1. small and medium sized concerns.
2. new concerns set-up by new entrepreneurial group.
3. specific industries, which require funds for modernisation.
4. enterprises involved in innovation and new technological developments.
5. enterprises requiring extra-ordinarily large amounts of finance with a longgestation period.
6. ventures in backward regions.

Values conveyed by the Government by establishing specialised financial institutions are:

1. promoting social and economic welfare.
2. sensitivity towards the underprivileged sections of the society.

Entrepreneurs can typically seek venture capital to assist at any of the following four stages in the company's development:

1. Early stage financing this stage includes:

1. Seed capital finance:

• It refers to the capital required by an entrepreneur for conducting research at pre-commercialization stage.
• During this stage, the entrepreneur has to convince the investor (VC) why his idea/ product is worthwhile.
• The investor will investigate into the technical and the economical feasibility of the idea.
• In some cases, there is some sort of prototype of the idea/ product that is not fully developed or tested.
• As the risk element at this stage is very high, investor (VC) may deny to assist if he does not see any potential in the idea.
• 'Entrepreneur's ability, technological skills and competencies are required to match with the market opportunities so as to successfully convince about product/ idea's feasibility to the venture capitalist.

2. Start up finance:

• If the idea/ product/ process is qualified for further investigation and/or investment, the process will go to the second stage; this is also called the start-up stage.
• A business plan is presented by the entrepreneur to the VC firm. A management team is being formed to run the venture.
• If the company has a board of directors, a person from the VC firms will take seats at the board of directors.
• While the organisation is being set up, the idea/ product gets its form.
• The prototype is being developed and fully tested.
• Sometimes, clients are being attracted for initial sales. The management-team stablishes a feasible production line to produce the product.
• The VC firm monitors the feasibility of the product and the capability of the management-team from the board of directors.

3. Second-round financing:

• At this stage, the time comes the idea has been transformed into a product and is being produced and sold.
• This is the first encounter with the rest of the market, the competitors and attempt is to squeeze in the market and get some market share from the competitors.
• The entrepreneur, at this stage, needs assistance from the Venture Capitalist for expansion, modernization, diversification so that the economies of scale and stability could be attained.

2. Last stage financing/ bridge/ pre public stage: In general, this is the last stage of the venture capital financing process. The main goal of this stage is for the venture to go public so that investors can exit the venture with a profit commensurate with the risk they have taken. At this stage, the venture achieves a certain amount of market share. This gives the venture some opportunities for example:

• Merger with other companies.
• Keeping new competitors away from the market.
• Eliminate competitors.
• Development capital.

Types of Specialised Financial Institutions:
Entrepreneurs have access to any of the following SFIs to choose from, according to their needs and requirements:

S.No	(A) At national level/ All India development banks	(B) At state level
1.	Industrial Development Bank of India (IDBI)	State Financial Corporation (SFCs)
2.	Small Industries Development Bank of India (SIDBI)	Tourism finance Corporation of India (TECI)
3.	Indutrial Finance Corporation of India (IFCI)	State Industrial Development Corpoations (SIDC)
4.	Industrial Credit and Investment Corporation of India (ICICI)
5.	National Bank for Agriculture and Rural Development (NABARD)
6.	Industrial Investment Bank of India Ltd.(IIBI)

Industrial Investment Bank of India Ltd. (IIBI): The Industrial Investment Bank of India Ltd. (IIBI) was formed by transforming the Industrial Reconstruction Bank of India (IRBI). It was set up by IDBI at the instance of the Government of India in April 1971 for rehabilitation of sick industrial companies.
IRBI was incorporated under the Companies Act, 1956 and renamed as the Industrial Investment Bank of India Ltd. in March 1997.
Functions: IIBI offers a wide range of products and services such as:

1. Term-loan assistance for project finance.
2. Short duration non-project asset–backed financing working capital/ other short term loans to companies.
3. Equity Subscription Asset Credit.
4. Equipment finance.
5. Investments in Capital Market and Money market instruments.

SEBI has been vested with the following powers:

1. To make and approve by-laws of stock exchanges.
2. To enquire the stock exchange to amend their by-laws.
3. Inspect the books of accounts and call for periodical returns from recognized stock exchanges.
4. Inspect the books of accounts of financial intermediaries.
5. Compel certain companies to list their shares in one or more stock exchanges.
6. Levy fees and other charges on the intermediaries for performing its functions.
7. Grant license to any person for the purpose of dealing in certain areas.
8. Delegate powers exercisable by it.
9. Prosecute and judge directly the violation of certain provisions of the Companies Act.
10. Power to impose monetary penalties.

An entrepreneur seeks venture capital financing under following circumstances:

1. High risk: Ventures which involve high risk due to various reasons like technological, creativity and innovation, etc. are subjected to high risk related to returns. Here the venture capitalist comes forward.
2. Seed funding: Seed money, is a form of securities offering in which an venture investor purchases part of a business. Interest of the venture capitalist for purchase of security is also a reason.
3. Expansion: If the entrepreneur wants to expand then he goes for venture capital.
4. Business skills: Lack of business skills also forces the entrepreneur to go for venture capital.

S.No	NABARD National Bank for Agriculture and Rural Development	TFCI Tourism Finance Corporation of India
1.	NABARD was established according to the preamble to the Act, “for providing credit for the promotion of: • Agriculture • Small-scale Industries • Cottage and Village Industries • Handicrafts and other rural crafts • Other economic activities in rural areas with a view to promoting IRDP and securing prosperity of rural areas....”	TFCI provides financial assistance to enterprises for setting up or the development of tourism-related projects, facilities and services such as hotels, restaurants, holiday resorts, amusement parks, entertainment centres, education and sports, rope ways, cultural centres, convention halls, transport, travel and tour operating agencies, air services, tourism emporia and sports facilities.
2.	The bank will serve as a financing institution for institutional credit such as long-term, short-term, and for the promotion of activities in rural areas.	The bank will serve as a financing institution for institutional credit such as long-term. The projects with a capital cost of RS. 1 crore or above are generally eligible for assistance from TFCI. Smaller projects would also be considered.
3.	To provide direct lending to any institution as may be approved the central Government.	It also provides advisory and merchant banking sendees in this field.

Differences between primary market and secondary market are:

S. No.	Basis	Primary market	Secondary market
1.	Meaning	Primary market deals with the trading of newly issued securities.	Secondary market is that part of capital market which deals in already issued securities.
2.	Role of the issuing company	Issuing company plays an active role as shares are sold directly to the investors.	The company has no role to play as securities are traded between investors only.
3.	Determination of Price	Price is determined by the company.	Price is determined by the market forces of demand and supply.

The importance of a stock exchange from the view point of entrepreneurs/ companies:

1. Recognition: The market values of companies' shares are published in important dailies. This enhances the reputation of good companies/ entrepreneurs.
2. Wide market: The securities of some companies are listed in some stock exchanges. The market for the securities of such companies is considerably widened. Thus, larger amounts of capital may be raised from different types of investors.
3. Higher share values: People have a tendency to buy shares that have some premium value. Demand of such shares increases. This leads to further increase in the price of such shares.

Value Points:

• Enhances the reputation of good companies
• Universal
• Social services
• National awareness
• Readiness to cooperate
• Helpfulness
• Consideration for other
• Friendship

Following are the features of stock exchange

1. Association of persons: It is an association of persons or body of individuals which may be registered or unregistered.
2. Recognition from central government: It is an organized market. It requires recognition from the Central Government.
3. Market for securities: It is a market, where securities of corporate bodies, government and semi-government bodies are bought and sold.
4. Deals in second hand securities: It deals with shares, debenture, bonds and such securities already issued by the companies. In short, it deals with existing or second hand securities and hence it is called secondary market.
5. Regulates trade in securities: It does not buy or sell any securities on its own account. It merely provides the necessary infrastructure and facilities to its members and brokers who trade in securities. It regulates the trade activities so as to ensure free and fair trade.
6. Allow dealings only in listed securities: It always maintain an official list of securities that could be purchased and sold on its floor.
7. Transactions effected only through members: All the transactions in securities at the stock exchange are effected only through its authorized brokers and members. No outsiders or direct investors are allowed to enter in the trading circles of the stock exchange.
8. Working as per rules: Buying and selling transactions in securities at the stock exchange are governed by the rules and regulations of stock exchange as well as SEBI Guidelines. No deviation from the rules and guidelines is allowed in any case.
9. Specific location: It is a particular market place where authorized brokers come together daily (i.e. on working days) on the floor of market called trading circles and conduct trading activities. The price of different securities traded are shown on electronic boards. After the working hours market is closed. All the working of stock exchange is conducted and controlled through computers and electronic system.
10. Financial barometers: Stock exchanges are the financial barometers and development indicators of ERF national economy of the country. Industrial growth and stability is reflected in the index of stock exchange.

The financing schemes of state level financial institutions are as follows:

1. SFCs provide financial assistance to small and medium enterprises, whether belonging to corporate or non-corporate sector and engaged not only in manufacture, preservation or processing of goods, but also mining, hotel industry, transport undertakings, generation or distribution of electricity, repairs and maintenance of machinery, setting up or development of an industrial area or industrial estate, etc.
2. Provide long-term and medium-term loan repayment, ordinarily within a period not exceeding 20 years.
3. Grant financial assistance to any single industrial concern under corporate sector with an aggregate upper limit of ₹60 lakh. For non-corporate sector, the upper limit is ₹ 30 lakh.
4. Provide financial assistance to those industries whose paid-up share capital and free reserves do not exceed ₹ 3 crore.
5. Guaranteeing loans raised by industrial concerns which are repayable within a period not exceeding 20 years.
6. Guaranteeing deferred payment due from an industrial concern for purchase of capital goods in India.

Difference between NABARD and TFCI are:

S.No.	Basis	National Bank for Agriculture and Rural Development (NABARD)	Tourism Finance Corporation of India (TFCI)
1.	Mode of formation	It was formed, subsequent to the passing of NABARD Bill in the Parliament and started functioning from 1st July, 1982.	It was incorporated as a public limited company under the Companies Act, 1956 on 27th January, 1989 and became operational with effect from 1st February, 1989.
2.	Reason for formation	It was formed to provide credit for the promotion of agriculture, SSls, handicrafts, cottage and village industries.	It was formed to cater to the needs of the tourism in the country.
3.	Functions performed	The functions performed can be categorised as credit, developmental and regulatory	It performs only credit and developmental functions.

Logo	Specialised financial Institution	Full form and establishment year
		Investment Credit and Investment Corporation of India (ICICI) - established in 1955
		Industrial Investment Bank of India (IIBI) – established in 1971
		National Bank for Agriculture and Rural Development (NABARD) -established in 1982
		Industrial Finance Corporation of India (IFCI) - established in 1948
		Small Industries Development Bank of India (SIDBI) - established in 1990
		Industrial Development Bank of India (IDBI) – established in 1964
		Tourism Finance Corporation of India (TFCI) – established in 1989

Industrial Investment Bank of India (IIBI) was formed by transforming the Industrial Reconstruction Bank of India (IRBI). It was set-up by IDBI for rehabilitation of sick industries. IRBI was initially incorporated under the Companies Act, 1956 and renamed as the Industrial Investment Bank of India Limited in March 1997.The functions performed by IIBI are as follows:

1. Term loan assistance for project finance.
2. Short duration, non-project asset-backed financing working capital/ other short-term loans to companies.
3. Equity subscription asset credit.
4. Equipment finance.
5. Investments in capital and money market instruments.

Values exhibited by IIBI are:

1. Romoting economic development: By providing rehabilitation to sick industries, IIBI is promoting economic development.
2. Generating employment opportunities: By providing financial assistance to enterprises, IIBI is generating employment opportunities.

Business angel or informal investor or an angel investor, is an affluent individual who provides capital for a business startup and early stage companies having a high-risk, high-return matrix usually in exchange for convertible debt or ownership equity.Features of Angel Investors: Providing start-up finance to the needy who want to start a small own business. The main people involved to provide funds are “friends and family”, (it can be seed funding and formal venture capital). But raising of funds cannot be more than a few thousands from friends and family, even the venture capitalist are least interested to make investments. Thus, angel investments is a common second round of financing for high-growth start-ups or early stage companies.

1. Most angel investors are current or retired executives, business owners or high net worth individuals who have the knowledge, expertise, and funds that help start-ups match up to industry standards.
2. They bear extremely high risk and are usually subject to dilution from ETERUS future investment rounds.
3. They expect a very high return on investment.
4. Apart from investing funds, most angels provide proactive advice, EU guidance, industry connections and RETETE mentoring start-ups in its early days.
5. Their objective is to create great companies by providing value creation, and simultaneously helping investors realize a high return on investments.
6. They have a sharp inclination to keep abreast of current developments in a particular business arena, mentoring another generation of entrepreneurs by making use of their vast experience.