Venture capital
Venture capital
- Tez No: 51635
- Danışmanlar: PROF.DR. ÖZDEMİR AKMUT
- Tez Türü: Yüksek Lisans
- Konular: İşletme, Business Administration
- Anahtar Kelimeler: Belirtilmemiş.
- Yıl: 1996
- Dil: Türkçe
- Üniversite: Ankara Üniversitesi
- Enstitü: Sosyal Bilimler Enstitüsü
- Ana Bilim Dalı: Belirtilmemiş.
- Bilim Dalı: Belirtilmemiş.
- Sayfa Sayısı: 160
Özet
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Özet (Çeviri)
131 VII. SUMMARY The Venture Capital financing model, which has been successfully applied at Europe and the U.S.A. for many years, has found its place in the Turkish finance world upon the publication of the“Circular On the Principles Regarding Venture Capital Investment Partnerships”in the Official Gazette dated 6 July 1993 and numbered 21629. In general terms, the Venture Capital financing model is a system envisaging the financial support of persons having a good business idea with commercial potential plus the necessary venture skills and know-how, but not enough financial sources, for the purpose of granting an opportunity for them to realize their ideas. This system aims to financially support persons who have dynamic, motivated, and new investment ideas, and may be summarized in the following manner: In order to benefit from the enterprising venture capital system, it is required to first prepare a“business plan”-a summarized feasibility study. When this business plan is sent to a venture capital company, the company has the plan examined by its own experts and specialists. In conclusion to the preliminary examination, if a negative opinion is specified for the project, it will not be regarded as a proposal. However, if a positive opinion is given during the preliminary examination stage, this time the venture capital company will seriously review the project in question. The proposed project receiving a positive opinion will be seriously re-examined in an extensive manner, and, if necessary, a new feasibility study will be realized. If the venture capital company does not deem the proposal feasible at this stage, it will reject it.132 However, If the project is deemed feasible, and if it is assessed that it is on the anticipated level of profitability, the venture capital company will contact the entrepreneur who owns the project. The company and the entrepreneur will determine reciprocal conditions by means of negotiations, and then are to initiate the process required for establishing the firm. The venture capital financing model is generally applied for realizing profitable and new investment proposals. However, the profit ratio expected from new investments may not be as requested due to various reasons. In this case, venture capital companies prepare investment portfolios to lessen the risk. Therefore, venture capital companies do not invest only in new projects. We may categorize venture capital investments in the manner given below: 1. Seed Investments 2- Start-Up Investments 3- Expansion Investments 4- Bridge Financing or Turn-Around Investments 5. Leveraged Buy-Out Investments 6. Other Investments At this stage, we may specify certain characteristics of the venture capital financing model in the following manner: 1. In this financing model, the relationship between a venture capital company and the astablishment where the investment was made, is not a debt-credit one. At this point, venturing into a joint investment is in question. While partnership shares are determined through negotiations and bargaining, the venture capital company sometimes participates in management in to provide consultancy services to the invested company.133 2. Venture Capital companies do not have a tendency to constantly retain the share certificates of the companies which they have invested in. Their main objective is to secure profits by selling these share certificates in capital markets as soon as the invested companies start to profit. The mean retention period of these share certificates is between 3-10 years. From the aspect of ensuring the smooth operation of this system, the existence of a developed capital market is essential. 3. Although the venture capital financing model is usually utilized in the financing of new investments, for the purpose of spreading the high risk caused by the characteristics of new investments, investment companies are including companies at each stage of development in their portfolios. It is possible to specify the funds acquired by venture capital companies in order to be used in the financing of their investments as follows: a. The savings of upper-level income groups ready to undertake high risks in order to gain large profits. b. Funds accumulating at social security institutions. c. Investment funds allocated by banks and private insurance companies for profit purposes. d. Funds provided by governments in order to encourage the establishment of small-scale industrial enterprises. e. Funds belonging to large companies. With regard to venture capital companies which have collected a sufficient amount of funds from the sources enumerated above, it has134 been seen that from time to time they may organize in different ways according to the special conditions of the country where they are located. However, in general, these companies organize in a manner similar to the US application: a. Small Business Investment Companies (SBIC), b. Venture Capital Limited Companies. a. Small business investment companies organized under a law put into force in 1958 concentrate on providing venture capital to small establishments having growth potential. In the U.S.A., an SBIC may be established with an equity capital of at least USD 1 million. Furthermore, it may also receive a loan amounting to three times as much as its equity from the Small Business Administration (SBA). These companies may invest only in small-scale establishments. Since small business investment companies obtain a majority of their capital from loans extended by the SBA, they are regarded as companies extending medium-or longterm loans rather than venture capital companies. These companies are subjected to a distinction in the form of independent companies established by persons (Noncaptive SBIC's), and companies established by institutions but affiliated to the parent company (Captive SBIC's). b. In the American application, we see that most venture capital companies are organized in the form of limited companies. The main reason for this situation lies behind the fact that the persons and entities providing funds wish to undertake a risk only proportionate to the amount of funds they provided. In addition to this, an other reason is the fact that limited companies are not subject to corporation tax, hence potential losses may be deducted from the other revenues of the135 shareholders. Furthermore, in Subchapter S of US tax legislation, tax facilitations have been provided for companies invested in by venture capital companies. With regard to this financing model, whose legal infrastructure was formed with the“Circular On the Principles Regarding Venture Capital Investment Partnerships”published in the Official Gazzette dated 6 July 1993 and numbered 21629, we may specify certain characteristics of its application in our country in the manner given below: 1. This system has been intended as a long-term and non-interest financing instrument based on tax advantages. 2. While technology-intensive sectors are glimpsed in the American and European applications of the venture capital financing model, no restrictions have been introduced for the companies to be invested in our country -it was deemed sufficient for them to have growth potential. 3. In the said circular published by the Capital Market Board, no restrictions were imposed on the management structures of venture capital investment partnerships. 4. The related arrangements have provided the opportunity for financing at every stage of the venture capital process. 5. No restrictions have been put on the matter of the methods of exiting from venture capital investments. 6. In the system of our country, it is also possible to invest in public enterprises that do not have good administration, but do have development potential.136 The introduction of the circular regarding this financing system, which has been successfully implemented in Europe and the U.S.A. for many years and also caused the beginning of an innovation development process, has become a major step with regard to the implementation of this system in our country. It is anticipated that once this system is put into application, it will contribute to the economic and technological development of our country.
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