Partheeswaran. P, Tamil Nadu National Law University
Introduction
“The innovation industries are rapidly going global. In five years, more than 50% of venture capital returns will come from markets outside the United States, including China, India, Brazil, and Australia, and Always. On events are on top of these trends” - Jim Breye (Founder and CEO of Breyer Capital) In 1984 a student named Michael Dell from the University of Texas, dropped out from the college to do a business related to computer product and services with the receiving a capital worth $ 1000 from his family but in very first year of the business the gross profit was $ 73 million and after in 2 years 1986 Lee Walker a venture capitalist joined the company and became chief operating officer and the company went public in 1988. Now Dell is one of the largest computer technological corporations in the world. This shows the incredible growth of a business when venture capitalist comes forward to fund entrepreneurs and it directly impacts the economy. The venture capitalism is present for many ages but In India it took over a major leap after the time of liberalization, globalization and privatization in 1991. After the economic liberalization the Indian government wanted to introduce many changes regarding the legal framework to regulate the capitalism and securities. In 1992 the statutory regulatory body SEBI was introduced to monitor the capital in the country and securities exchange but there was no proper regulation to oversee venture capital fund after the establishment of SEBI in 1996 it passed ‘Securities And Exchange Board Of India (Venture Capital Funds) Regulations, 1996 to supervise the venture capital funds but it didn’t include funds of private equity fund and Real estate fund so there was in need of larger legal frame work to manage the venture capitalism, so for that SEBI passed Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012, it brought all types of alternate investment to come under one umbrella and made mandatory registration for all venture capital funding companies. Since there is lots of changes happening in business so there is need of frequent strict laws to keep the mechanism in check. The cause and effect is important to study in the law and mainly in regulatory law and there is also a comparative study between India and US so we could understand the position of India.
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