Financial Institution:

Financial institution is an institution that provides financial services for its clients or members.

Financial service provided by financial institutions is acting as financial intermediaries. Most financial

institutions are regulated by the government. Financial institutions provide service as intermediaries of

financial markets. They are responsible for transferring funds from investors to companies in need of

those funds. Financial institutions facilitate the flow of money through the economy.

There are three major types of financial institutions:

1. Depositary Institutions : Deposit-taking institutions that accept and manage deposits and

make loans, including banks, building societies, credit unions, trust companies, and mortgage

loan companies

2. Contractual Institutions : Insurance companies and pension funds;

3. Investment Institutes: Investment Banks, underwriters, brokerage firms.

Venture Capital:

Venture capital is a form of equity financing especially designed for funding high risk, high technology

and high-reward projects. It is a equity finance based upon a fact that a partnership can be formed

between the entrepreneur and the venture capitalist or the investors and thus, represents an attempt to

innovative entrepreneurship which goes beyond connection.

Steps for Venture capital:

1) Seed money finance

2) Start-up

3) First Round Financing

4) Second Round Financing

5) Third Round Financing

6) Fourth Round Financing

Examples of Venture Capitalist Funds:

Program for Advancement of Commercial Technology

Technology Development and Investment Corporation of India

Risk Capital and Technology Finance Corporation

Venture Capital Scheme of IDBI

Credit Capital Venture Fund (India)

SIDBI venture Capital Fund

SBI Capital Venture Fund

Canbank Venture Capital Fund

http://en.wikipedia.org/wiki/Financial_regulationhttp://en.wikipedia.org/wiki/Governmenthttp://en.wikipedia.org/wiki/Loanhttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Building_societyhttp://en.wikipedia.org/wiki/Credit_unionhttp://en.wikipedia.org/wiki/Trust_companyhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Insurance_companyhttp://en.wikipedia.org/wiki/Pension_fundhttp://en.wikipedia.org/wiki/Investment_Bankshttp://en.wikipedia.org/wiki/Underwritinghttp://en.wikipedia.org/wiki/Brokerage_firm

Angel Investor:

An angel investor or angel (also known as a business angel or informal investor) is an affluent

individual who provides capital for a business start-up, usually in exchange for convertible debt

or ownership equity.

Angels typically invest their own funds, unlike venture capitalists, who manage the pooled money of

others in a professionally-managed fund. Although typically reflecting the investment judgment of an

individual, the actual entity that provides the funding may be a trust, business, limited liability

company, investment fund, or other vehicle. Angel investments bear extremely high risk and are

usually subject to dilution from future investment rounds.

Example of Angel Investor: Indian Angel Network is first and largest angel group of India.

Registration of firm/ unit in DIC:

Registration of an existing or proposed small scale enterprise is voluntary and not compulsory. It has

no statutory basis. But, registration is beneficial for the enterprise itself because it makes the unit

eligible for availing the benefits given by the Central or State Governments for the promotion of SSIs

The State Directorate or Commissioner of Industries or District Industries Centres (DIC's) are the

concerned authorities for registration of small scale units. This registration is both location specific

and product specific. Like in certain State capitals and metropolitan cities, it is granted to only those

units which are located in the designated industrial areas/estates.

Some of the formalities required to be completed for seeking permanent registration are:-

Clearance from the municipal corporation

State pollution control board clearance

Sanction from the electricity board

Ownership/tenancy rights of the premises where unit is located

Copy of partnership deed/Memorandum of articles of association in case of a private limited

company

Sale bill of product manufactured

Sale bill of each end product

Purchase bill of each raw material

Purchase bill of machinery installed

BIS/QC certificate if applicable

An affidavit giving status of the unit, machinery installed, power requirement, etc.

http://en.wikipedia.org/wiki/Startup_companyhttp://en.wikipedia.org/wiki/Convertible_debthttp://en.wikipedia.org/wiki/Ownership_equityhttp://en.wikipedia.org/wiki/Venture_capitalhttp://en.wikipedia.org/wiki/Collective_investment_schemehttp://en.wikipedia.org/wiki/Trust_lawhttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Investment_fundhttp://en.wikipedia.org/wiki/Stock_dilutionhttp://business.gov.in/outerwin.php?id=http://msme.gov.in/msme_links_stategovt_sdi.htm

Govt Schemes:

Prime Minister's Employment Generation Programme (PMEGP) as been announced on 15th

August,2008 and launched in place of REGP Scheme.Prime Ministers Employment Generation

Programme (PMEGP) is a credit linked subsidy programme of Government of India.

It has been introduced by merging the two schemes, namely, Prime Ministers Rojgar Yojana

(PMRY) and Rural Employment Generation Programme (REGP).

The Scheme is implemented by Khadi and Village Industries Commission (KVIC), a statutory

organization under the administrative control of the Ministry of MSME as the single nodal agency at

the National level. At the State level, the Scheme is implemented through State KVIC Directorates,

State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and banks.

Objectives:

-To generate employment opportunities in rural as well as urban areas through setting up of self

employment ventures.

-To bring together widely dispersed traditional artisans/ rural and urban unemployed youth and give

them self-employment opportunities to the extent possible, at their place and also to increase their

income

-To provide continuous and sustainable employment to a large segment of traditional and prospective

artisans and unemployed youth, so as to help arrest migration of rural youth to urban areas.

Credit linked capital subsidy scheme:

The Ministry of Small Scale Industries (SSI) is operating a scheme for technology upgradation of

Small Scale Industries (SSI) called the Credit Linked Capital Subsidy Scheme (CLCSS).

The Scheme aims at facilitating technology upgradation by providing upfront capital subsidy to SSI

units, including tiny, khadi, village and coir industrial units, on institutional finance (credit) availed of

by them for modernisation of their production equipment (plant and machinery) and techniques.

The Scheme (pre-revised) provided for 12 per cent capital subsidy to SSI units, including tiny units,

on institutional finance availed of by them for induction of well established and improved technology

in selected sub-sectors/products approved under the Scheme. The eligible amount of subsidy

calculated under the pre-revised scheme was based on the actual loan amount not exceeding Rs.40

lakh.