The Strange Case of Dr Jekyll Essay Example for Free

The Strange Case of Dr Jekyll Essay Just as The Italian includes a stone chamber, secured by doors of iron, Dr Jekyll and Mr Hyde too contains a peculiar locked cabinet in which Poole, Dr Jekylls butler, believes his master has been murdered and that the person who has locked himself away is Hyde. The fact that these secret rooms are included in the novels, allows the reader to speculate the strange things that might be going on behind the sealed doors of the rooms. All in all, Gothic literature is extremely evident in Dr Jekyll and Mr Hyde but at the same time it is heavily influenced by Victorian psychology, which I will now be commenting on. Victorian society was heavily based on power, wealth and culture. Victorians believed they were ethical, moral people and their society was that of an ideal one; however with the amount of crimes taking place i. e. Jack the Ripper this was not the case especially since Victorians were sexist and racist. Even though Stevenson sets his story in the heart of London using such respectable professional people as lawyers, doctors and men of science, what he shows us is a city fraught with divisions. Such divisions included those between the rich and poor, men and women, country and city, science and art, and also good and evil shown to us by Dr Jekyll and Mr Hyde, who not only does he represent a form of rebellion against the arrogant domination of the upper classes and government, but also the beast in man. Stevenson greatly investigates the duality of human nature in his novel. This theme does not emerge fully up until the last chapter, when the complete story of the Jekyll-Hyde affiliation is exposed by Henry Jekylls Full Statement of the Case. Therefore, we confront the theory of a dual human nature unambiguously only after having witnessed all of the events of the novel, including Hydes crimes and his eventual eclipsing of Jekyll. Dr Jekyll describes his dual personality as the animal within me licking the chops of memory. The text not only posits the duality of human nature as its central theme, but forces us to consider the properties of this duality and to contemplate each of the novels episodes as we weigh various theories. Such a theory includes that of Freuds theory of the id, ego and superego. The id is entirely unconscious and represents the primitive self of us. It is the self indulgent and selfish side of us. The ego, however unlike the id, spans the conscious, preconscious, and unconscious. The ego is the only component of personality that can interact with the environment. Lastly, the superego is the part of personality that establishes standards of right and wrong. The superego is the ethics and morality behind our personality. In the 19th Century, it was believed that the id was represented by a troll like figure, and Hyde is described as being pale and dwarfish. As Stevenson probes the depths of human psychology and challenges our perceptions of good and evil in society, we are struck by the disturbing face of evil. Dr. Jekyll tries to repress and kill off the Mr. Hyde in himself, but that alter ego is a part of who he is. He cannot renounce or destroy that part of himself. In The Picture of Dorian Gray Dorian, represented by his ego and superego, is in conflict with his id represented by the picture painted of him as a young, handsome man. In Henry Jekylls Full Statement of the Case the story of Jekylls downfall is revealed to Mr Utterson. Jekyll suggests to us that mankind has a split personality when saying severed in me those provinces of good and ill which divide and compound mans dual nature. Stevenson provides us with the message that man has two sides to him not just Jekyll. There are many quotations to suggest this too. Such examples in this chapter include: primitive duality of man, the agonised womb of consciousness, these polar twins should be continuously struggling- this is in fact a metaphor describing our consciousness being like a womb, man is not truly one, but truly two and lastly I stood already committed to a profound duplicity of life. From what Stevenson has produced, I can conclude that Dr Jekyll and Mr Hyde cannot easily be seen as having more to do with Gothic tradition than late 19th Century psychology. We must take into account that psychology is a subject matter and Gothic is a style, however I consider the novel has been written carefully and equally in terms of Gothic tradition and late 19th century psychology as I believe the style of Gothic literature has been heavily influenced by Victorian psychology. Some might argue against Gothic tradition being the more dominant argument, simply for the reason that Stevenson has not included involvement of haunted castles and dungeons, two of the most obvious Gothic traits. As a closing statement to this essay, I can admit Dr Jekyll and Mr Hyde was published truly as a chilling shocker in 1886 and still today remains as an original classic. Simran Kooner 10HA English Coursework 1 Show preview only The above preview is unformatted text This student written piece of work is one of many that can be found in our GCSE Miscellaneous section.

Nursing Crisis Intervention: Stroke

Nursing Crisis Intervention: Stroke Stroke is a global problem of the increasing elderly population. According to the Department of Health (2007a), stroke is the third leading cause of death in the UK, with more than 110,000 individuals falling victim to a stroke each year at a cost to the National Health Services exceeding  £2.8 billion. The Stroke Association (2007) places this number at 130,000 with a mortality rate at 67,000 per year, including indirect costs of  £1.8 billion and costs for informal healthcare following stroke at  £2.4 billion. Incidence of stroke is equally as prevalent elsewhere, such as in the United States where, as the third leading cause of US deaths (Becker Wira 2006; Nolan Naylor 2003) stroke is the leading cause of disability (Becker Wira 2006; Stroke Association as cited by Amber 2003, p. 316; Stroke Association 2007). Becker and Wira (2006) state the incidence of stroke within the United States is 400,000 individuals per year with an anticipated growth to over 1 million yearly st roke victims by 2050. The American Stroke Association (as cited by Amber 2003, p. 316) states â€Å"every 45 seconds, someone in America has a stroke. Every 3.1 minutes, someone dies of one.† Nolan and Naylor (2003) state an average of 35,000 individuals suffer strokes when hospitalized for other unrelated illnesses. Such was the case for Ms. C., who suffered an ischemic stroke while hospitalized for a pacemaker implant. As the unit nurse assigned to care for Ms. C., subtle signs of her stroke were noticed and reported to the Code Gray[1] team for immediate response. The many roles of a unit nurse in the presence of a crisis are vital in providing adequate care to her patient, including the need to maintain a calm demeanour in the face of chaos. A number of rapid physical assessments must be performed including the use of the FAST criteria[2] (Mathiesen et al, 2006), response teams must be alerted and the nurse must keep the patient calm and oriented throughout the flurry of activity that can easily upset an elderly individual. While all emergencies call for rapid response, it is even more critical in the case of stroke when, if the patient is eligible for recombinant tissue plasminogen activator (t-PA)[3] a detailed physical history and examination, a neurological assessment, computed tomography (CT) scan and additional blood work must be performed before irreparable damage from the stroke occurs. With a focus on patient impact and nursing interventions, this paper will present the case study of Ms. C. Case presentation Ms. C., a 78-year-old, ambulatory, Caucasian female was admitted to the hospital for the replacement of a cardiac pacemaker. Ms. C. was widowed 5 years prior to her current hospitalization and lived alone having two married children living in Scotland and Wales. Prior to admission Ms. C. was diagnosed with high blood pressure (HBP), high cholesterol, was diabetic, and was on pharmaceutical medication for all three conditions. In spring 1995, Ms. C. had recurrent bouts of tachycardia alternating with bradycardia. Following an attempt to control the situation through pharmaceutical intervention, her cardiologist recommended she receive a cardiac pacemaker; which was implanted without complication the same year. She reports remaining in good health since that time; although additional medical notes indicate the onset of dementia, as she appears confused at times. Upon admission, vitals were normal, with the exception of her blood pressure (BP) which was 175/95. Her physician ordered Ms. C. be started on Losartan[4]. Subsequent vitals indicated a fluctuation in BP ranging from a low of 170/90 at 1AM to a high of 195/110 at 10AM. As Ms. C. was not responding to medication or fluid balancing recommended by her physician and her BP continued to climb, her cardiologist postponed surgery until her BP was brought under control. At 11:48am, when taking Ms. C.’s vitals, she appeared confused, her speech was slurred, there was slight facial droop and she could not extend her arm for the blood pressure cuff. At 11:50am a Code Gray alert was sounded. Impact on the patient When assessing the impact to the patient when a stroke occurs, the nurse must be aware of the implications on a variety of levels, including biological, psychological and sociological. In the case of Ms. C., there were additional implications for each of these due to the combination of her low-level, yet progressive dementia. Biological changes in an ischemic stroke (confirmed by the CT scan as opposed to hemorrhagic) were the result of a thrombolytic occlusion at the cerebral artery branch point due to atherosclerosis. On the cellular level, neuronal damage occurs when neurons become depolarized and allow for inordinate amounts of calcium to cross the cellular membrane that ultimately leads to a destruction of said cellular membrane and other structures within the neuron (Becker Wira 2006). Becker and Wira (2006) also comment on the neuronal damage caused by free radical, arachidonic acid and nitric acid generation that takes place during the ischemic cascade[5]. Genetic activation also takes place and leads to the production of cytokines in response to and as a cause of inflammation that can â€Å"consume† the ischemic penumbra (Becker Wira 2006). If one can limit the degree of injury to the ischemic penumbra located within the origami, the degree of permanent damage due to the ischemic episode is limited and is the goal of immediate stroke response (Becker Wira 2006). A combination of diagnostic laboratory tests[6] and rapid nursing assessments would be required to assess the level of damage. Although the Code Gray approach is geared towards rapid response to allow for administering t-PA within the three-hour window, Ms. C. was not eligible for t-PA treatment due to her uncontrolled hypertension (Bonnono et al. 2000, p. 300). The psychological impact on Ms. C was the most dramatic as her post-stroke status left her more confused and fearful than one might find in a strike victim due to the comorbid dementia. In addition to being frightened of the unknown and feeling very alone as a widow and without her children present, Ms. C. felt betrayed by her body and didn’t understand what was happening to her or why. Psychologically Ms. C. had to be kept calm and be reminded of what was occurring and why, with such orienting comments as â€Å"You are going to be examined by Dr. X† or â€Å"You are going to have a test done that won’t hurt you. There is no need to be afraid; I’ll be with you to assure you’re safe.† With the unknown of any comprehension deficits caused by the stroke it was also important to remind other team members that Ms. C. had problems with confusion and that it was important â€Å"for patients with dementia in particular to understand what is about to happen to them† (Cunningham McWilliam 2006, p. 14). Cunningham and McWilliam (2006, p. 14) suggest that nursing staff must compensate in their communication with dementia patients and that this often requires nurses to re-prioritize their tasks and sense of immediacy in order to offer the patient the greatest level of psychological and/or emotional support. Lipley (2005) states one of the most important nursing tasks is offering support to a stroke patient. The sociological impact relating to Ms. C.’s crisis was limited for the immediate future while hospitalized, although she indicated that she wanted her children contacted and requested they come to the hospital. The biggest sociological change and challenges facing Ms. C. would be following her discharge from the hospital. Depending on the amount of total damage suffered from her stroke and the subsequent progress with therapy to regain lost functionality, it was probable that Ms. C. would relocate to either live with one of her children and/or settle in a home for the aged. This required the nurse to contact a social worker to help Ms. C. with her adjustment. Implications for the organization One of the six strategic goals established by the Department of Health’s National Stroke Strategy (2007b) is to â€Å"accelerate the emergency response to stroke and improve coordination between different agencies and professionals involved including through improved access to CT scanning.† Fortunately, the hospital where Ms. C. suffered her stroke complied with this goal and had a Code Gray team assembled. National Health Services (2007) approximates 90 percent of hospitals in England as prepared to administer specialized stroke services. The number of stroke victims is increasing every year. The nurses must be aware of required interventions. This paper has highlighted the ischemic stroke and patient impacts, as well as those on the organization and nurse. The charts below presents required nursing interventions in response to an inpatient stroke. Reference Amber, R., Watkins, W., 2003. The community impact of Code Gray. Critical Care Nursing Quarterly, 26 (4), pp. 316-322. Becker, J. U. Wira, C., R. 2006. Stroke, Ischemic [Online]. Available from: http://www.medscape.com/emerg/topic558.htm [cited March 16 2007]. Bonnono, C., Criddle, L. M., Lutsep, H., Stevens, P., Kearns, K., Norton, R., 2000. Emergi-paths and stroke teams: An emergency department approach to acute ischemic stroke. Journal of Neuroscience Nursing, 32 (6), pp. 298-305. Cunningham, C. McWilliam, K., 2006. Caring for people with dementia in AE. Emergency Nurse, 14 (6), pp. 12–16. Department of Health, 2007a. Stroke [Online]. Department of Health. Available from http://www.dh.gov.uk/en/Policyandguidance/Healthandsocialcaretopics/Stroke/index.htm [cited March 16, 2007]. Department of Health, 2007b. Developing a national stroke strategy [Online]. Department of Health. Available from http://www.dh.gov.uk/en/Policyandguidance/Healthandsocialcaretopics/Stroke/DH_4132138 [cited March 16, 2007]. Department of Health, 2007c. Good practice examples and case studies: standard five (strokes) [Online]. Department of Health. Available from http://www.dh.gov.uk/en/Policyandguidance/Healthandsocialcaretopics/Olderpeoplesservices/Olderpeoplepromotionproject/DH_4002291[cited March 16, 2007]. Lipley, N., 2005. Different strokes†¦ Emergency Nurse, 13 (5), p. 5. Mathiesen, C., Tavianini, H. D., Palladino, K., 2006. Best practices in stroke rapid response: A case study. Medsurg Nursing, 15 (6), pp. 364-369. Nolan, S., Naylor, G. Burns, M., 2003. Code Gray: An organized approach to inpatient stroke. Critical Care Nursing Quarterly, 26 (4), pp. 296-302. Spilker, J., Kongable, G., Barch, C., Braimah, J., Bratina, P., Daley, S., Donnarumma, R., Rapp, K. Sailor, S., 1997. Using the NIH stroke scale to assess patients. Journal of Neuroscience Nursing, 29 (6), pp. 384-393. Stroke Association, 2007. Facts and figures about stroke [Online]. The Stroke Association. Available from http://www.stroke.org.uk/media_centre/facts_and_figures/index.html [cited March 16, 2007]. Wojner, A. W., Morgenstern, L., Alexandrov., A. V., Rodriguez, D., Persse, D., Grotta, J., 2003. Paramedic and emergency department care of stroke: Baseline data from a citywide performance improvement study. American Journal of Critical Care, 12 (5), pp. 411-417. 1 Footnotes [1] The term generally accepted in the medical community for multidisciplinary stroke response teams. The typical composition of a Code Gray team includes a primary care RN, charge RN from the Stroke/cardio care unit, an ICU RN, ICU resident, a neurologist, CT technologist and an individual responsible for telecommunications (Nolan Naylor 2003, p. 297). The Department of Health (2007c) reports that other Code Gray teams also include occupational therapists, physiotherapists, speech and language therapists, dieticians, pharmacists, a clinical psychologist and social worker. [2] FAST criteria is the acronym also known as the Cincinnati Pre-hospital Stroke Scale, such that F = Facial Droop, A = Arm drift, S = Speech and T = Time (Mathiesen et al. 2006; Lipley 2005). [3] t-PA must be administered within three hours of the first onset of symptoms (Amber 2003). [4] Losartan is an angiotensin receptor blocker. The choice was made to use this type of intervention based on the muscle relaxing nature of the medication rather than incorporating those that lowered BP through a modification of electrical activity within the nervous or cardiac system due to the reliance on her pacemaker and the potential other such forms of medication might have on recurrent tachycardia or bradycardia. [5] Ischemic cascade is the term referring to the chain of events that takes place following an ischemic stroke. [6] Although a variety of diagnostic blood work was already performed on Ms. C, a CBC, chemistry panel and cardiac biomarkers were ordered following the stroke for comparison against pre-stroke values along with coagulation studies (Becker Wira 2006).

The Aesthetic, the Postmodern and the Ugly: The Rustle of Language in William S. Burroughs’ The Soft Machine and The Ticket That Exploded :: Essays Papeers

The Aesthetic, the Postmodern and the Ugly: The Rustle of Language in William S. Burroughs’ The Soft Machine and The Ticket That Exploded Ugliness is everywhere. It is on the sidewalks—the black tar phlegm of old flattened bubblegum—squashed beneath the scraped soles of suited foot soldiers on salary. It is in the straddled stares of stubborn strangers. It is in the cancer-coated clouds that gloss the sweet-tooth sky of the Los Angeles Basin with bathtub scum sunsets rosier than any Homer finger-painted dawn. Like the treble yell of helpless children, ugliness is piercing, unavoidable, everywhere. Yet, some powerful pieces of literature, with the assistance of paroxysmal words juxtaposed against brutal vistas and bitter emotions, have transformed the ugly into the beautiful. Here are some obvious examples: the monomania of Ahab in Herman Melville’s Moby-Dick ; Rhoda’s descent towards suicide in Virginia Woolf’s The Waves ; Walt Whitman’s telling of the shipwreck of the San Francisco in â€Å"Song of Myself†Ã¢â‚¬â€in these works, the lilting power of lang uage, with its ability to moisten raw and tender flesh, exposes the friction between unsightly sores and the soaring majesty of the greatest art—the ability to transform the ugly into the beautiful. What I describe in the previous paragraph pertains to the literary realm of the aesthetic. George Levine frames the aesthetic scene as being composed mostly of moments when readers â€Å"have felt overwhelmed, perhaps on the verge of tears, the whole body thrillingly interested† (4). Geoffrey Galt Harpham describes it in the following terms: â€Å"[Precisely] as ‘theoretical confusion,’ as the undecidablitity between object and subject, freedom and the repressive law, critical and uncritical passages, grievous and necessary misreadings, even art and ideology† (135). Yet, in certain theoretical writings about postmodernism, there seems to be no confusion at all. Instead, what has been described appears as an-aesthetic: a style, or a poetics, that deadens and numbs a tendency towards the aesthetic in postmodern literature. Jean-Franà §ois Lyotard describes postmodern writing as putting â€Å"forward the unpresentable in presenatation itself; that which denies itself the solace of good forms† (81). Linda Hutcheon even suggests that postmodern poetics might, instead, be referred to as â€Å"a ‘problematics’† (224). In her book The Poetics of Postmodernism, Hutcheon focuses on an-aesthetic forms in the critical and literary writings on and within postmodernism without any consideration of the aesthetic.

Temptation in Where Are You Going , Where Are you Been? Essay -- Where

The Theme of Temptation in â€Å"Where Are You Going , Where Are you Been?† by Joyce Carol Oates In â€Å"Where are You Going, Where Have you Been?† Joyce Carol Oates uses an allegorical figure of evil to illustrate the theme of temptation. Oates alludes to hell through the character Arnold Friend, as the devil, and his victim Connie, who invites him in by committing the sin of vanity. The narrator implies that Arnold Friend is Satan by giving certain clues that the reader can easily deduce. The name that Oates gives to the character is one hint to the reader: â€Å"Connie looked away from Friend's smile to the car, which was painted so bright it almost hurt her eyes to look at it. She looked at the name, Arnold Friend. She looked at it for a while as if the words meant something to her that she did not yet know† (583). The name â€Å"friend† was commonly used by the Protestants to refer to evil or the devil. Moreover, Arnold Friend's appearance also hints that he is Satan: â€Å"There were two boys in the car and now she recognizes the driver: he had shaggy, shabby black hair that looked as a crazy wig†(583). The narrator emphasizes the â€Å"wig† to make the reader think that he is wearing it for a purpose, which is hide his devil’s horns. Also, the fact that Arnold Friend's eyes are covered is another stragedy use by Oates to c onfirm the assumption of the diabolic presence: â€Å" He took off the sunglasses and she saw how pale the skin around his eyes was it, like holes that were not in shadow but in...

The Pastoral Ideal in Thomas Grays Elegy (Eulogy) Written in a Country

The Pastoral Ideal in Thomas Gray's Elegy (Eulogy) Written in a Country Churchyard Thomas Gray’s "Elegy Wrote in a Country Churchyard" portrays the pastoral ideal through many different images. The traditional pastoral notion of idyllic life changes in this poem to form a connection with people themselves. The speaker of this poem creates a process by which laborers come to symbolize the perfection of the pastoral through their daily toils. These people come to represent the ideal form of pastoral life. In this poem, however, Gray consigns these people and their lifestyle to darkness and death in order to save them from a world whose changing ideals support their idyllic lifestyle. This poem can be broken into four parts. These parts describe a kind of conversation between the speaker and the fading light of the traditional pastoral notion. The first part, ending around line 28, shows the ways in which the working people have integrated successfully into the pastoral lifestyle. The second, and longest part, ending around line 73, paints a portrait of an "urbanized pastoral" where people are no longer ignorant of their own potential, but strive to make changes in the world around them. Though this in itself is not necessarily negative, by desiring to change the world, the pastoral ideal of static bliss is directly challenged. The third section gives a kind of resolution to the situation by letting the pastoral tradition slide, safe and unmarred, into the comforting darkness of death. The opening stanza paints a portrait of the end of a day. The herds of farm animals walk away from the speaker to their home, just as a weary farmer "plods" (3) his way back home. All of these figures recede from the speaker into the appr... ... poet could the pastoral be kept alive. The speaker deals with this concept throughout "Elegy Wrote in a Country Church Yard." The "darkness" which is alluded to in the first stanza is the place the world has left the pastoral. As "The Plow-man homeward plods his weary Way," (3) he leaves behind the realm of the pastoral for the speaker to deal with. As society begins to turn its back from fanciful simplicity, towards commercial complexity, the poet’s duty falls to creating a place where the world of the pastoral is safe. For Gray, this is the darkness of death. This poem, however, does not create this "darkness" of death as an everlasting sleep. Rather, the importance of the pastoral is kept safe, and has the ability to influence generations of socially-influenced people that there is a world of peace and simplicity awaiting them, if they choose to look for it. Â  

Case Study: Not Just Another Outdoor Company

THE HONG KONG POLYTECHNIC UNIVERSITY MM2021: Management & Organization |Case Study: Not Just Another Outdoor Company | Case Scenario The company we are discussing this time, based in Portland, Oregon, was the brainchild of a small group of executives who left big-time jobs at Patagonia, Nike, and Adidas. These individuals shared a belief that â€Å"in addition to generating a profit, companies have an equal responsibility to create positive social and environmental change†.Putting their beliefs into action, the group formed Nau (which is Maori for â€Å"Welcome! Come in†). And Nau is not just another outdoor company! When deciding what Nau was going to be like and how it was going to do business, the founders know they did not want to do things the way they would always been done by traditional businesses. CEO Chris Van Dyke said, â€Å"We started with a clean whiteboard. We believed every single operational element in our business was an opportunity to turn traditiona l business notions inside out, integrating environmental, social, and economic factors†.From design to sales to finances, Nau is driven by these factors. Everything is Nau’s operation has been approached with a sustainability and social justice â€Å"Filter†. In the design area, the company, in partnership with suppliers, developed 24 of its 32 fabrics to be more sustainable and to combine performance and visual appeal. Each supplier, manufacturer, and even Nau itself is bound by a code of conduct. To ensure that all parties are living up to the standards, their actions are overseen by an independent, nonprofit auditing and research firm.In the sales area, the way the company retails its product is also unique. Using a concept it calls a â€Å"Web-front†, Nau has combined the efficiency of the Web with the intimacy of a gallery-like boutique. In the â€Å"store†, customers can try on clothes, but they use self-service kiosks to purchase from the Web . Because in-store inventory is greatly reduced, the stores are small (2,400 squares feet compared to the standard 4,000-plus-square-foot outdoor retail store). This approach saves operating expenses because less energy and fewer materials are used. Good for the planet†¦good for the business.Finally, Nau has a unique financial approach it calls â€Å"aggressive altruism†. The company has pledged 5 percent of sales to charitable organizations dedicated to solving crucial environmental and humanitarian problems. The â€Å"philanthropic gold standard† is 1 percent of sales, and the average among all corporations is . 047 percent. But although the amount it gives is unusual what happens with Nau’s dollars is really exceptional: Nau puts the giving decision in the hands of its customers. They are asked to indicate which â€Å"Partners for Change† they would like their 5 percent to go to.Using this â€Å"conscious choice† process, Nau is â€Å"call ing its customers out, daring them to connect the dots†. Discussions: 1. What do you think of Nau’s approach to doing business? Is it being ethical and responsible? Discuss. [pic] Sources: Nau Website, www. nau. com; and P. LaBarre, â€Å"Leap of Faith†, Fast Company, June, 2007, pp. 96-103. Robbins, S. P. and Coulter, M. (2009). Management. Pearson Prentice Hall. ———————– Each student is required to discuss Question 1 as short essay, i. e. 500 words (as 5% of your continuous assessment).

The venture capital and private equity industry

Journal of Indian Business Research Emerald Article: Venture capital and private equity in India: an analysis of investments and exits Thillai Rajan Annamalai, Ashish Deshmukh Article information: To cite this document: Thillai Rajan Annamalai, Ashish Deshmukh, (2011),†Venture capital and private equity in India: an analysis of investments and exits†, Journal of Indian Business Research, Vol. 3 Iss: 1 pp. 6 – 21 Permanent link to this document: http://dx. doi. org/10. 1108/17554191111112442 Downloaded on: 24-09-2012References: This document contains references to 25 other documents To copy this document: [email  protected] com This document has been downloaded 365 times since 2011. * Users who downloaded this Article also downloaded: * Vedran Vuk, (2008),†Taking advantage of disaster: misrepresentation of housing shortage for political gain†, International Journal of Social Economics, Vol. 35 Iss: 8 pp. 603 – 614 http://dx. doi. org/10. 1108/03 068290810889224 Doru Tsaganea, (2011),†Tension reduction by military power equalization: the USA-USSR case†, Kybernetes, Vol. 0 Iss: 5 pp. 778 788 http://dx. doi. org/10. 1108/03684921111142313 Guihe Wang, Ligang Qu, Limin Fan, Tianbiao Yu, Wanshan Wang, (2009),†Web-based system for industry using information and communication technologies†, Kybernetes, Vol. 38 Iss: 3 pp. 533 – 541 http://dx. doi. org/10. 1108/03684920910944254 Access to this document was granted through an Emerald subscription provided by For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service.Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www. emeraldinsight. com/authors for more information. About Emerald www. emeraldinsight. com With over forty years' experience, Emerald Group Publishing is a leading independent publisher of globa l research with impact in business, society, public policy and education. In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive range of online products and services. Emerald is both COUNTER 3 and TRANSFER compliant.The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. *Related content and download information correct at time of download. The current issue and full text archive of this journal is available at www. emeraldinsight. com/1755-4195. htm JIBR 3,1 Venture capital and private equity in India: an analysis of investments and exits 6 Thillai Rajan Annamalai and Ashish Deshmukh Department of Management Studies, Indian Institute of Technology Madras, Chennai, India AbstractPurpose – The venture capital and private equity (VCPE) industry in India has grown signi? cantly in recent years. During ? ve-year period 2004-200 8, the industry growth rate in India was the fastest globally and it rose to occupy the number three slot worldwide in terms of quantum of investments. However, academic research on the Indian VCPE industry has been limited. This paper seeks to ? ll the gap in research on the recent trends in the Indian VCPE industry. Design/methodology/approach – Studies on the VCPE transactions have traditionally focused on one of the components of the investment lifecycle, i. e. nvestments, monitoring, or exit. This study is based on analyzing the investment life cycle in its entirety, from the time of investment by the VCPE fund till the time of exit. The analysis was based on a total of 1,912 VCPE transactions involving 1,503 ? rms during the years 2004-2008. Findings – Most VCPE investments were in late stage ? nancing and took place many years after the incorporation of the investee ? rm. The industry was also characterized by the short duration of the investments. The type of e xit was well predicted by the type of industry, ? nancing stage, region of investment, and type of VCPE fund.Originality/value – This paper highlights some of the key areas to ensure sustainable growth of the industry. Early stage funding opportunities should be increased to ensure that there is a strong pipeline of investment opportunities for late stage investors. VCPE investments should be seen as long-term investments and not as â€Å"quick ? ips†. To achieve this, it is important to have a strong domestic VCPE industry which can stay invested in the portfolio company for a longer term. Keywords Venture capital, Equity capital, India, Investments, Financing Paper type Research paper . Growth of the Indian VCPE industry Over the last few years, India has become one of the leading destinations for venture capital and private equity (VCPE) investments. Though the concept of VCPE investment prevailed in the country in one form or another since the 1960s, the growth in the industry was mainly after the economic reforms in 1991. Prior to that, most of the VCPE funding was from public sector ? nancial institutions, and was characterized by low levels of investment activity. In recent years, VCPE commitments and investments in India have grown at a rapid pace.Venture economics data indicate that during the period 1990-1999, India’s ranking was 25th out of 64 and various VCPE funds raised $945. 9 million for investments in India; however, during the next decade, 2000-2009, India’s ranking rose to 13th out of 90 countries and the funds raised $16,682. 5 million for investments in India. Journal of Indian Business Research Vol. 3 No. 1, 2011 pp. 6-21 q Emerald Group Publishing Limited 1755-4195 DOI 10. 1108/17554191111112442 The authors would like to gratefully acknowledge the ? nancial support provided by the Indian Council of Social Sciences Research and IIT Madras for this research.They would also like to acknowledge the support of M. B . Raghupathy and V. Vasupradha for this research. This represents a growth of 1,664 percent over the previous decade. The trend is even more encouraging for the most recent ? ve-year period 2005-2009, during which India’s ranking was 10th out of 77 countries, and various funds raised $15,073. 6 million for VCPE investments in India. Funds raised during 2005-2009, represented a growth rate of 837 percent as compared to funds raised over the previous ? ve-year period 2000-2004. The growth rate in investments made by various VCPE funds has been equally strong.During the ? ve-year period 2004-2008, the industry growth rate in India was the fastest globally and it rose to occupy the number three slot worldwide in terms of quantum of investments[1]. The amount invested by VCPE funds grew from US$ 1. 8 billion in 2004 to US$ 22 billion in 2007 before tapering off to US$ 8. 1 billion in 2008[2]. During the ? ve-year period ending 2008, VCPE investments in India grew from 0. 4 percent of GDP in 2004 to more than 1. 5 percent of GDP in 2008 (Annamalai and Deshmukh, 2009). The rest of the paper is structured as follows: Section 2 indicates the objective of the paper.Section 3 provides details on the data set used for analysis and the sources of data. Section 4, which covers the results and discussion, is divided into six sub-sections. The sub-sections are in the following order: round wise analysis of investments, time of incorporation and ? nancing stage, intervals between funding rounds, investment exits, duration of investment, and a statistical analysis of investment duration and type of exit. Section 5 provides a summary of the paper. 2. Objective of the paper Research on VCPE has not been in tune with the growth seen in the industry.Past research on the Indian VCPE industry can be broadly classi? ed into the following categories: studies that examined the evolution and the current status of the industry (Pandey, 1996, 1998; Verma, 1997; Dossani and Kenney, 2 002; Singh et al. , 2005); multi country studies which also included India (Lockett et al. , 1992; Subhash, 2006; Ippolito, 2007); survey studies of VCPE industry practices in India (Mitra, 1997; Vinay Kumar, 2002, 2005; Vinay Kumar and Kaura, 2003; Mishra, 2004); and studies which can be considered as case studies of VCPE investments (Kulkarni and Prusty, 2007).The objectives of this paper are as follows: ? rst, research that has focused on the recent growth phase of the VCPE industry in India has been limited. Most of the papers that have studied the Indian industry were either before the growth phase (pre-2004) or did not cover the growth phase in full, starting from the onset of growth in 2004 until the slowdown in 2008, caused by the global ? nancial crisis. This paper is an attempt to meet the gap in research on the recent trends in the Indian VCPE industry. Second, there have been very limited studies that looked at the lifecycle of investments, i. . from the time of investme nt in the company until their exit from the investment. There have been several studies that have looked at areas related to investments such as investment decision making, structure of investments, and valuation. Similarly, there have been studies that have looked at topics related to venture exits. However, there have been limited studies that looked at the entire investment life cycle. The main contribution of this paper is to look at the investment lifecycle in its entirety.Third, this paper aims to highlight some of the lesser known features of the Indian VCPE industry such as the characteristics of the investee ? rm at the time of VCPE investment, the duration of VCPE investments in the ? rm, and the timing and mode of exit by the investors. The objective of this paper is to provide an holistic understanding of the Indian VCPE industry to enable the creation of a policy environment to sustain the growth of the industry. VCPE in India 7 JIBR 3,1 8 3. Data set used and sources T his study uses VCPE investment transaction data during the years 2004-2008.The choice for the period of analysis was driven by two considerations. First, it was during this period that the industry witnessed signi? cant growth and India emerged as one of the leading destinations for VCPE investments. Therefore, a detailed study of this industry growth would be of general research interest. Second, the choice of period was also governed by practical considerations. Data on VCPE investments in India before 2004 were not available in a form that can be used for a research study. Therefore, it was decided to begin the starting period of the study at year 2004, the year from which we had access to data.It was felt that a ? ve-year study of transactions would be a reasonable time frame to overcome the yearly ? uctuations. This ? ve-year period also coincided with a full ? nancial cycle in the global ? nancial markets, a period marked by dramatic growth and equally dramatic fall. The data for the study were obtained from multiple sources. To start with, deal data on the various investments and exits were obtained from two database sources: Venture Intelligence India[3] and Asian Venture Capital Journal[4] database. The data from both these databases were combined to form a comprehensive data set.The data set was then suitably checked for data repetition and duplicate data points were removed ? rst. Second, whenever there was a difference in the information given for the same deal, the correctness and accuracy was checked by independent veri? cation from other sources, such as newspaper reports and company web sites. Information that was not available in these databases was then separately sourced from the web sites of the independent companies. Admittedly, with the lack of a strong database on Indian investments, developing such a data set involved a lot of effort.The comprehensive data set that was developed provided various details on the VCPE investments and exits that happened in India during 2004-2008. It consisted of a total of 1,912 VCPE transactions involving 1,503 ? rms during the period 2004-2008. From these 1,503 ? rms, 1,276 ? rms had only investment transactions while another 129 ? rms had only exit transactions during the ? ve-year period. The remaining 98 ? rms had both VCPE investment and exit transactions. To facilitate a more detailed analysis, the investments were classi? ed into ten industry categories and four ? ancing stages based on the lifecycle stage of the investee ? rm and the objectives of the investment. Exits were classi? ed into two categories, namely initial public offer (IPO) and merger and acquisition (M) or trade sale. 4. Results and discussion 4. 1 Round-wise analysis of investments Firms seeking to raise VCPE investments normally receive the investment in multiple rounds (Sahlman, 1990); earlier works have provided several explanations for this trend. Gompers (1995) indicates that the staging of capital infu sions allows venture capitalists to gather information and monitor the progress of ? ms, while retaining the option to periodically abandon projects. Admati and P? eiderer (1994) indicate that such an option to abandon is essential because an entrepreneur will almost never quit a failing project as long as others are providing capital and the threat to abandon creates incentives for the entrepreneur to maximize value and meet goals. Neher (1999) indicates that multiple rounds of ? nancing overcome the potential agency con? icts between the entrepreneur and investor as previous rounds create the collateral to support the later rounds. While the stage of ? ancing is determined by the objectives and timing of investment, the round of ? nancing simply indicates the number of instances of VCPE investments in the ? rm. Thus, for example, Round 1 ? nancing is the ?rst instance of the ? rm getting VCPE investment, but it need not be always early stage ? nancing. Depending on the ? rm lifecy cle and the objectives of investment, Round 1 ? nancing can happen in any of the four ? nancing stages. Similarly, there could be multiple rounds of investment happening in the same stage. In a particular round of funding, there may be many investors jointly investing in the company.For example, when there is a co-investment by more than one VCPE investor at the same time, it is considered as a single round of investment. By the same token, when the same investor makes investments in the ? rm at different times at different valuations, each investment is considered a separate round of funding. Funding rounds are considered to be different when there has been a substantial time gap from the previous round of ? nancing and/or the investment happens at a different valuation from the previous round of funding. Figure 1 shows the results from the round wise analysis of VCPE investments.The results indicate that 82 percent of the total VCPE investments were in Round 1, i. e. ?rst time VCP E investments in the company. Out of the total amount of investment, follow on investments account for only 18 percent. It can be observed that investments decrease sharply with subsequent funding rounds. One possible reason behind this could be because of the nature of data: most of the investment has happened during the later years of the study period[5], indicating that suf? cient time might not have elapsed for the next round of investment.However, these results indicate the possibility that VCPE investments are happening at a much later stage in the ? rm lifecycle and the ? rm is not in need of an additional funding round for reaching a critical size that is needed for an IPO or for ? nding a buyer. This might also be explained by the grandstanding theory (Gompers, 1996), where VCs are keen to exit more quickly from their investments. Second, this trend can also indicate that the companies that have received the ? rst round might not have been able to achieve a strong enough pe rformance to attract the next round of investment from investors.Further studies are needed to understand this pattern in detail. Table I indicates that the number of rounds of funding received by companies in different industries was 1,912 from a total of 1,503 companies. This indicates that the average number of rounds in a company was 1. 27. As can be seen from Table I, a large majority of the ? rms have received only one round of VCPE investment. This result accompanies the results in Figure 1 well, which indicate that 82 percent of the total Round 3 1,061. 85 (2. 6%) Round 2 5,394. 11 (14%) VCPE in India 9 Round 4 391. 25 (1%) Round 5 170. 6 (0. 4%) Round 1 2,961. 47 (82%) Figure 1. Round-wise VCPE investments (in US$mn) during 2004-2008 JIBR 3,1 Industry 10 Table I. Count of companies for different funding rounds Computer hardware Engineering and construction Financial services Healthcare IT and ITES Manufacturing Non-? nancial services Others Telecom and media Transportation and logistics Grand total Count of companies for different funding rounds 1 2 3 4 5 6 7 36 137 110 92 295 214 133 65 93 51 1,226 5 21 30 19 53 25 12 10 15 8 198 1 6 5 6 12 6 5 3 4 3 51 1 1 3 2 3 3 2 1 1 17 1 2 8 1 1 1 1 2 1 3 1 4 2 2 Total companies 43 167 151 120 364 250 153 9 112 64 1,503 investments were Round 1 investments. Only 13 percent of companies have obtained two rounds of funding, and approximately 5 percent of the total companies that have received VCPE investments during the period have obtained more than two rounds. The proportion of companies that have received the second round of funding in different industries is more or less the same as what we saw for Round 1 investments, except in the ? nancial services category. The phenomenon of some industries being more successful in getting Round 2 investments could not be clearly observed in our analysis.In a way, this is a surprising trend. For example, information technology (IT) and information technology-enabled servic es (ITES) companies constitute 24 percent of the total number of companies that have received funding, 24 percent of the companies that have received the ? rst round of funding, and 25 percent of the companies that have received more than one round of funding. This indicates that IT and ITES companies, seen as one of the engines of growth in India, have not had higher proportional success than companies in other industries in attracting multiple rounds of funding.The ? nancial services companies constitute 10 percent of the total companies that have received funding, 9 percent of the companies that have received one round of funding, and 15 percent of the companies that have received more than one round of funding. This indicates that ? nancial services companies have a better track record of getting additional investment rounds. The reasons could be numerous – the larger funding requirements created the need for funding to happen in multiple rounds and companies that had obt ained the ? st round of funding would have been able to showcase a strong performance track record to attract the subsequent rounds of funding. The industry itself was in an upswing in India during the study period and this might have contributed to investor interest in investing in subsequent rounds. It could also be due to the institutional and regulatory features of private equity (PE) investing in India. For example, funding could be done in multiple rounds because of the procedural issues in foreign investments in certain sectors. Further studies are needed to identify the determinants of funding rounds.One would reasonably expect that multiple rounds of funding would be observed in more capital intensive industries. Among the ten industry categories, engineering and construction and manufacturing sectors are very capital and asset intensive. However, it can be seen that the proportion of companies receiving additional rounds of funding in these sectors is not more than the pro portion of companies that have received ? rst-round funding. On the contrary, the proportion of companies receiving additional rounds of funding in manufacturing is less than that of their proportion in Round 1 ? ancing. Several explanations are possible for this trend, which needs to be substantiated with further research. Companies are receiving VCPE funding at a much later stage in the lifecycle and they do not need additional rounds of funding before providing an exit to the investor. It is possible that, because of their asset intensive nature, they are able to get access to debt funding thereby limiting the possibility of additional rounds of VCPE ? nancing. VCPE in India 11 4. 2 Time of incorporation and ? nancing stage It is well known that VC investments happen early in a ? rm’s life.It is during the early stage that companies have limited means to raise money from conventional sources and look to sources like VC for meeting the funding requirements. Table II provide s the results from our analysis of the interval between the year of incorporation of the company and the ? nancing stage. The results indicate some interesting trends. Early stage funding should normally happen within the ? rst couple of years after the incorporation of the ? rm. But in our analysis, we ? nd that 17 percent of the ? rms have received their early stage funding as much as ten years after they were incorporated.While the highest frequency of early stage funding can be seen in the one- to three-year category, a large proportion of companies get their early stage funding even until the ? fth year from the time of incorporation. This indicates the disinclination of the VCPE investors in India to make investments in very early stages. A majority of the growth stage investment happens between ? ve and eight years from incorporation. However, the second highest percentage of growth stage funding happens after 15 years after incorporation. While growth stage ? nancing during the ? e- to eight-year period seems reasonable (though it is still more than that which is normally associated with growth ? nancing), growth ? nancing happening after 15 years from incorporation needs to be studied in detail. It could either be a question of willingness or readiness. Either the investors are not willing to invest earlier or the companies are not ready to receive VCPE funding in their early years. The companies might have explored funding from family, banks, or friends before taking investment from VCPE investors. Financing stage Early Growth Late Pre-IPO Time since incorporation (in years) ,1 20 13. 6% ,3 22 9. 3% 7 2. 3% 7. 7% 1-3 51 34. 7% 3-5 26 11. 0% 15 5. 0% 0 0. 0% 3-5 37 25. 2% 5-8 68 28. 8% 25 8. 3% 6 15. 4% 5-8 13 8. 8% 8-10 36 15. 3% 19 6. 3% 3 7. 7% 8-10 1 0. 7% 10-15 31 13. 1% 61 20. 3% 13 33. 3% Total . 10 25 17. 0% . 15 53 22. 5% 173 57. 7% 14 35. 9% 147 236 300 39 Table II. Number of VCPE deals for different ? nancing stages vs time since incorporat ion of investee companies JIBR 3,1 12 Analysis of late stage investment deals, as can be expected, show an increasing trend with time from incorporation. However, more than half of the late stage deals that have been studied are seen in companies more than 15 years after their incorporation.This again re-con? rms the earlier ?ndings that VCPE investors have been more inclined to invest in companies that have a longer track record and operating history, and have a suf? cient size. From the perspective of companies that are receiving VCPE funding, such late stage funding, could indicate that these companies might have been part of a larger business group, which provided the ? nancial support in their early years. Further studies need to be done to understand the antecedents of ? rms that receive late stage investment.But one of the most compelling observations which attracts immediate attention is that about 75 percent (541 out of 722[6]) deals are in companies that are more than ? ve years old. Almost 60 percent (429 out of 722) VCPE deal investments are made in ? rms that are eight years old or more. This supports the earlier inferences that VCPE funds in India are more inclined to invest in ? rms that have a track record of performance. While this investment trend might not be very different from that which is seen in other emerging economies such as Brazil (Ribiero and de Carvalho, 2008), it is much more marked in India.Therefore, it is felt that most of the VCPE investments in India are in the nature of PE investments rather than VC investments, which are typically investments made in early stage companies. 4. 3 Intervals between funding rounds Table III presents average time intervals in months between different rounds of PE funding (for Rounds 1-3)[7] across industries. The average time interval across industries between Round 1 and Round 2 funding is 13. 69 months, which is just slightly more than year. The average time interval between Round 2 and Round 3 funding is 10. 1 months, which is less than a year. The median values for the above intervals are 12. 17 and 11. 17 months, respectively. The closeness of the mean to median values indicates that there is no signi? cant skew in the time interval between different funding rounds. Figures 2 and 3 show the distribution of time intervals between rounds. These indicate that the deals are well distributed in the initial periods, with a slightly higher frequency around the mean value, and tapering down in the later periods. Since it takes about three to six months from the date of the ? rst signi? ant meeting with the investors to realize an investment, the low time interval between successive Industry Table III. Average time interval between successive rounds of VCPE funding (in months) R2-R1 R3-R2 Computer hardware Engineering and construction Financial services Healthcare IT and ITES Manufacturing Non-? nancial services Others Telecom and media Transportation and logistics Total 14. 43 17. 13 12. 28 14. 89 15. 64 11. 58 13. 93 8. 46 11. 16 9. 54 13. 69 16. 72 4. 88 7. 44 14. 22 12. 43 10. 14 16. 57 6. 03 15. 23 9. 63 10. 91 VCPE in India 50 45 Number of deals 40 35 30 13 25 20 15 10 5 0 3 3 to 6 6 to 9 9 to 12 12 to 18 18 to 24 24 to 36 ? 36 Duration (months) Figure 2. Time between Round 2 and Round 1 investments 14 12 Number of deals 10 8 6 4 2 0 ?3 3 to 6 6 to 9 9 to 12 12 to 18 18 to 24 24 to 36 Duration (months) ? 36 ?nancing rounds indicates that the top management of the company might be continuously devoting their energies in raising capital. This might not be good for business, as spending more time on raising ? nancing is likely to affect their attention to business operations. Our results also indicate that in the Indian context the pace of ? nancing increases with time.This result is somewhat surprising as, under normal circumstances, the size of funding increases with every additional round of funding and is expected to meet the needs of the company for a longer duration even after accounting for the higher cash burn rates due to the increase in company size. Analysis of time intervals for different industry categories indicates that the engineering and construction sector had the largest time interval between the ? rst and second round of funding. Some explanations, which need to be followed with further research, for this trend include being capital intensive.They raise large sums which Figure 3. Time between Round 3 and Round 2 investments JIBR 3,1 help the companies to sustain the operations for a longer period. They are able to get additional funding from other sources such as debt. Cash ? ows from operations would also contribute towards the ? nancing requirements. However, the time interval between second and third round is the lowest for this sector, which indicates that this could be due to the pre-IPO nature of funding. 14 4. 4 Investment exits Venture exit has been an area where there has been limited research (Gomp ers and Lerner, 2004).The VCPE investor after a certain period has to exit the investment to recover the same as well as to earn a return on it. The different possible exit routes play a major role in VCPE ? nancing and the likely availability of favorable exit opportunities in lesser time is one of the key criterions used by investors while evaluating investment opportunities. Though there are several exit routes for the VCPE funds such as IPO, secondary sale of shares, M, management buy outs, and liquidation. Exit by IPOs and trade sale through M are the more prevalent methods of exit in Indian VCPE markets.Of the total 252 exit events that were recorded during the ? ve-year period ending 2008, 84 events were IPOs and the remaining 168 were M. Thus, the ratio of exits of IPOs and M is exactly 0. 5, indicating that an exit by M is twice as likely as that by IPO. However, an analysis of this ratio across different industries provides an interesting picture. The ratio is less than 1 for all but two of the industry categories – engineering and construction, and transportation and logistics. Companies in this sector tend to be capital intensive industries with a large asset base and largely dependent on the Indian market.Since companies in this sector are much larger in terms of revenues or assets, it becomes comparatively easier to achieve an exit by means of an IPO. For sectors, that are not so asset intensive, M seem to be a common form of exit for VCPE investors. Computer-hardware, IT and ITES, and healthcare – all traditionally attractive industries for VCPE investments – show a strong inclination towards M exit routes with the ratio of IPO-M exits being less than 0. 4 (Figure 4). The choice of exit route is also in? uenced by the state of the capital markets. The ratio of IPO-M exits in each of the ? e years during the study period is shown in Figure 5. Figure 4. Ratio of exits by IPO to M across industries Co En m gi pu ne te er r-h in g ar an dw d ar co e ns tru Fi na ct io nc n ia ls er vi ce s H ea lth ca IT re an d IT M ES an N uf on ac -fi tu na rin ci g al se rv ic es Te O le Tr th co er an m s sp an or d ta m tio ed n ia an d lo gi tic s 1. 6 1. 4 1. 2 1 0. 8 0. 6 0. 4 0. 2 0 VCPE in India 0. 9 0. 8 0. 7 0. 6 0. 5 0. 4 15 0. 3 0. 2 0. 1 0 2004 2005 2006 2007 2008 Figure 5. Ratio of exits by IPO to M during 2004-2008 While the overall ratio of IPO-M exits is 0. 5 for the ? e-year period ending 2008, the ratio varies in line with the state of the capital markets. The ratio ranges from 0. 3 to 0. 6 for all years, except 2006, when it is signi? cantly high (. 0. 8). This can probably be attributed to the ? ourish in the IPO market in India during 2006. This is consistent with the ? nding that IPOs are more likely to occur when equity values are high (Lerner, 1994). In addition to the type of exit, the capital markets also in? uence the time taken for an investor to exit. The pattern of variation in an average number of rounds for the two exit methods over the years is shown in Figure 6.It can be noted that there are large variations for those companies that provided exits through IPOs. The number of rounds of VCPE funding before the IPOs are lower during the years 2006 and 2007, when the capital markets were active. Such variations could not be seen in those cases where the exits were from M. The number of rounds of funding before an M has been gradually increasing over the years, indicating that the size needed before an exit from an M has also been increasing over the years. But a more interesting inference could be for companies that exit from anM; the circumstances in the capital markets do not have a signi? cant effect. On the other hand, if the conditions are favorable, companies tend to make their IPOs in a shorter period to take advantage of the momentum in the capital markets. This is also supported by the fact that the average numbers of funding rounds are nearly equal for both the exit types during 2006 and 2007. 3. 5 Average number of rounds 3 2. 5 2 IPO 1. 5 Trade sale – M 1 0. 5 0 2004 2005 2006 2007 2008 Figure 6. Average number of funding rounds before exit during the ? ve years JIBR 3,1 16 4. 5 Investment durationThe duration of a VCPE investment is de? ned as the interval between the time of investment and exit[8]. It is generally considered that VCPE funds are not short-term investors, and stay invested in the ? rm between three and ? ve years; however, our analysis tells a different story. Table IV provides the investment duration for investments in different ? nancing stages. To make our analysis more accurate, this exercise was done only for those companies for which complete data on both investments and exits were available. A total of 110 transactions in 98 companies were included in this analysis.The main ? nding from Table IV is the overall short-term duration of VCPE investments in India. For 63 percent of the investment transactio ns, the average investment duration is less than one year. Even in those investments which can be classi? ed as growth stage, 75 percent of the investments have less than two years’ duration. For late stage investments, the proportion of exits within two years increases to 87 percent. Overall, the average duration of investment stands at just 17 months. In comparison, the investment duration for an IPO exit in the USA and Canada is 4. 7 and 5. 86 years, respectively.The investment duration for an exit through the acquisition route for the USA and Canada is 5. 17 and 6. 94 years, respectively, (Cumming and MacIntosh, 2001). For VCPE investments, which are generally considered medium to long-term investments, the observed duration in India is very low, indicating that most of the investments are late stage or pre-IPO types of investments. While Indian VCPE investors would generally indicate that they are long-term investors, the data corroborates that which many entrepreneurs h ave always felt: that VCPE funds need to be invested in the long term and not focused on quickly exiting from the investment.While these results are interesting, they also suffer from two limitations: the sample size and the ? ve-year time frame for analysis. Further con? rmatory studies that cover a longer time frame with more deals are needed. 4. 6 Statistical analysis of investment duration and type of exit As a part of this study, statistical analysis was done to determine whether any of the variables were able to explain the duration of VCPE investment and the type of exit. For this analysis, Investment duration and type of exit were taken as the dependent variables. Independent variables used in the study were industry, ? ancing stage, region, and type of VCPE fund. Bivariate regressions (Table V) indicate the relative in? uence of each independent variable on the dependent variables. As it can be expected, duration of investment can be best explained by ? nancing stage. The h igh f-ratio and the Financing stage Early Growth Late Table IV. Duration of VCPE investments Pre-IPO ,1 0 0. 0% 14 48. 3% 35 61. 4% 20 90. 9% Duration of investment (in years) 1-2 2-3 3-4 4-5 2 100. 0% 8 27. 6% 15 26. 3% 2 9. 1% 0 0. 0% 6 20. 7% 6 10. 5% 0 0. 0% 0 0. 0% 1 3. 4% 1 1. 8% 0 0. 0% 0 0. 0% 0 0. 0% 0 0. 0% 0 0. 0% .5 Total 0. 0% 0 0. 0% 0 0. 0% 0 0. 0% 2 29 57 22 R S. no. Dependent variable Independent variable(s) 1 2 3 4 5 6 7 8 Duration of Industry investment Financing stage Region Type of VCPE fund Exit mode Industry Stage Region Type of VCPE fund R2 Adjusted R2 SE of the estimate 0. 318 0. 387 0. 159 0. 278 0. 544 0. 429 0. 221 0. 115 0. 101 0. 150 0. 025 0. 077 0. 296 0. 184 0. 049 0. 013 0. 007 0. 118 0. 011 0. 066 0. 212 0. 154 0. 014 0. 001 10. 853 10. 157 10. 876 10. 453 0. 423 0. 439 0. 474 0. 477 ANOVA p-value F-ratio (Sig. ) 0. 938 4. 755 0. 696 6. 952 3. 506 6. 093 1. 389 1. 105 0. 498 0. 004 . 557 0. 010 0. 001 0. 001 0. 252 0. 296 VCPE in India 17 Table V. Results from bivariate regression analysis low p-value indicate the signi? cance of the regression. This can be easily explained as those investing in the early stage would remain invested for a longer duration and those investing in late stages would remain invested for a shorter duration. High f-ratio and low p-values are also noted for the bivariate regression that had a type of VCPE fund as the independent variable. In this study, VCPE funds were categorized into two: domestic and foreign. The fact that this has an in? ence supports the argument that domestic VCPE funds stay invested for a longer duration as compared to foreign funds. It was also noted that industry and stage of ? nancing have more in? uence on the exit mode as compared to other variables. These results can also be explained. Some industries could be more suited for exiting with IPOs because of the market bias. Similarly, many of the late stage and pre-IPO investments are made just before the company goes for an IPO. When these investments are being made, the investee company has a clear road map for going for an IPO.Therefore, the exit route in such late stage and pre-IPO investments are more or less clear at the time of the investment itself, unless there is an adverse change in market conditions. We performed a discriminant analysis in SPSS (Table VI) to predict the probable exit route for an investment, given the independent variables. Discriminant analysis Dependent variable (Y), i. e. exit method Original Count % Cross-validatedb Count % Predicted group membershipa 1 (IPO) 2 (M) Total 1 (IPO) 2 (M) 1 (IPO) 2 (M) 49 5 87. 5 17. 2 7 24 12. 5 82. 8 56 29 100. 0 100. 0 1 (IPO) 2 (M) 1 (IPO) 2 (M) 5 6 80. 4 20. 7 11 23 19. 6 79. 3 56 29 100. 0 100. 0 Notes: a85. 9 percent of original grouped cases correctly classi? ed and 80. 0 percent of cross-validated grouped cases correctly classi? ed; bcross-validation is done only for those cases in the analysis; in cross-validation, each case is cl assi? ed by the functions derived from all cases other than that case Table VI. Results from the discriminant analysis on exit method classi? cation JIBR 3,1 18 is typically used for the prediction of categorical or non-metric variable being classi? ed into two or more mutually exclusive categories.The independent variables used in the discriminant analysis were industry, ? nancing stage, region, and type of VCPE fund. The proportion of cases correctly classi? ed indicates the ef? cacy and relevance of the application of discriminant analysis for predicting the dependent variable, which in this case is the type of exit. Discriminant analysis was done on the investment and exit data for 85 out of 98 companies (for which all necessary details were available). Out of the 85 companies, IPO exits were observed for 56 companies and M for 29 companies. Table VI indicates the results from the discriminant analysis.It can be seen that 49 out of 56 IPO exits and 24 out of 29 M exits were corr ectly classi? ed, thus leaving an error of 12 out of 85 cases. Overall, 85. 9 percent cases are correctly classi? ed. To augment the validity and reliability of the ? ndings, a cross validation was done. In a cross validation, each case is classi? ed using a discriminant function derived from all cases other than the case being classi? ed. The cross validation results indicate that 45 out of 56 IPO exits were correctly classi? ed and 23 out of 29 M exits were correctly classi? ed. Overall, 80 percent of the cases were correctly classi? d. Both these results points towards the good predictive power of the available data in prediction of exit method choice. The results also indicate that it is possible to predict the type of exit based on the information available at the time of making an investment, i. e. industry, ? nancing stage, region of investment, and type of VCPE fund. This could indicate that investors are reasonably clear about the type of exit that they might get from a giv en investment. While the timing of exit might be uncertain, the type of exit seems more or less evident at the time of investment.More research needs to be done to determine whether the variables identi? ed in this paper are a good predictor for exit type or not, even in other markets. 5. Summary The growth and vibrancy in the Indian VCPE industry has attracted global attention. This paper highlights some areas of concern that need to be addressed for the long-term growth in the country. First, there has to be a creation of an ecosystem that encourages early stage investments. It would be such early stage investments that would spur innovation and provide the pipeline for growth and late stage investments.Venture economics data indicate that of the total PE commitments made to India, VC commitments[9] accounted for 90 percent during 1990-1999, 55 percent during 2000-2009, and 51 percent during 2005-2009. This indicates that though there has been an overall growth in funds committed to India, the proportion of VC commitments that primarily fund early stage investments have been gradually decreasing. In the absence of early stage investments, many PE funds would ? nd it dif? cult to ? nd new opportunities for follow on investments. The result would be a funneling of investments in established companies with increasing valuations.In the long run, the industry would fall apart under the burden of such high valuations leading to an exit of investors from India. To prevent this from happening, it is important to ensure that there is adequate early stage investing. Since domestic VCPE investors invest more actively in early stages[10], this points to the need for creating a more stronger and active community of domestic VCPE investors in India. Second, the short duration of VCPE investment does not bode well. A recent World Economic Forum report indicates that PE investors have a long-term ownership bias nd 58 percent of the PE investments are exited more than ? ve y ears after the initial transaction. So-called â€Å"quick ? ips† (i. e. exits within two years of investment by PE funds) account for only 12 percent of deals and have decreased in the last few years (Lerner and Gurung, 2008). Seen from this perspective, most of the VCPE investments in India could come under the category of â€Å"quick ? ips†. This trend, if it continues, would be a cause of real concern. It is expected that VCPE investors would do a lot of hand holding and participate in value-adding activities in their portfolio companies.However, contributing to the investment in such ways would happen only if the investors remain invested for a long term. Short-term investments deny the portfolio companies the opportunity to leverage the management expertise of the VCPE investors. Since the investment duration is also in? uenced by the source of VCPE funds, there is a strong need to promote the domestic VCPE industry in India[11]. The domestic investors would stay invested for a longer duration and this would give more opportunities to the investor to add value in the portfolio companies.Third, the time intervals between successive funding rounds should increase. Frequently, approaching the investors means that the top management attention gets diverted from the business operations. It would be bene? cial if the entrepreneurs and companies raise capital in such a way that the portfolio company can sustain the operations for at least two years. While they might feel that raising a large round would deprive them the bene? ts of valuation increases if funding is raised in multiple rounds, it would de? nitely help to keep the transaction costs lower.The issues of valuation increases can be addressed by incorporating suitable incentive structures in the shareholders’ agreement. The investors too should support the idea of a larger funding round for the companies and engage in co-investing with other VCPE investors if required. Given the exp loratory nature of this study, further research and con? rmatory studies are needed to corroborate the ? ndings of this paper. It is felt that many of the results in this paper are suf? ciently interesting to warrant further studies. Notes 1.Based on Subhash (2006) and PricewaterhouseCoopers Global Private Equity Reports 2004, 2005, 2006, 2007, and 2008. 2. Investment data from the PricewaterhouseCoopers Global Private Equity Reports might not match with that of the funds committed data from venture economics as we feel that many investments might have been made outside of a formal VCPE fund structure. In addition, several funds locally set up in India might not have been captured in the venture economics database. However, both the reports indicate the strong growth in funds committed to various VCPE funds and actual investments made in companies. . Venture Intelligence can be accessed at: www. ventureintelligence. in 4. Asian Venture Capital Journal database can be accessed at: ww w. avcj. com 5. Out of the 1,503 companies that received funding from VCPE investors, 866 companies, i. e. 58 percent of the companies received their funding during the last two years of the study period. 6. Information on time of incorporation was readily available only for 722 out of the 1,503 companies. 7. Since there are very few companies that have received more than three rounds of ? nancing, Round 4 and above have not been included for this analysis.VCPE in India 19 JIBR 3,1 20 8. Strictly speaking, it would dif? cult to determine when the investor actually exited from the investment, either partially or completely. One could ? nd that information by studying the annual reports as well as stock exchange ? lings of the company, which was not done in this study. Exit in this paper is meant to be understood as the time of occurrence of an exit event, which may or may not be the time of actual exit. 9. A distinction can be made between VC and PE commitments. VC commitments are ma inly targeted at the early stage and growth stage investment opportunities.PE commitments are primarily targeted at the late stage opportunities. Average investment in deals by PE funds is usually larger than those made by VC funds. 10. 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(2005), â€Å"Indian VCs’ involvement with investee ? rms: an empirical analysis of board composition, expectations and contribution†, ICFAI Journal of Applied Finance, July, pp. 28-39. Vinay Kumar, A. and Kaura, M. N. (2003), â€Å"Venture capitalists’ screening criteria†, Vikalpa, Vol. 28 No. 2, pp. 49-59. About the authorsThillai Rajan Annamalai is an Associate Professor in the Department of Management Studies at IIT Madras. His research interest includes VC, PE, infrastructure, and corporate ? nance. Thillai Rajan Annamalai is the corresponding author and can be contacted at: [email  protected] ac. in Ashish Deshmukh was an MBA student at the Department of Management Studies at IIT Madras. To purchase reprints of this article please e-mail: [email  protected] com Or visit our web site for further details: www. emeraldinsight. com/reprints VCPE in In dia 21