Venture Capital and Private Equity Module (Intermediate) Practice Exam

In recent years, the significance of small and medium enterprises (SMEs) in driving economic development has garnered considerable attention. However, these enterprises often face more significant financial constraints compared to larger firms. In such situations, venture capital and private equity play a crucial role in providing valuable resources for the growth of firms, particularly innovative SMEs, thereby fostering economic development and innovation within the economy. Private equity is recognized as a key component of a robust entrepreneurial ecosystem, having emerged as a significant source of funding for startups, growing companies, and acquisition transactions over the past few decades.

Venture Capital and Private Equity Module (Intermediate) exam objectives include:

• Understanding the role of private equity in the country and discerning the distinctions among various forms of early-stage financing.
  
• Familiarizing oneself with the structure of private equity funds and their operational frameworks.
• Understanding the comprehensive range of post-investment support services that accompany private equity capital.

Who should take the exam?

The exam is beneficial for:

• Students
• Finance Professionals
• Entrepreneurs
• Employees of SMEs
• Anybody having interest in this subject

Exam Details

• Exam Name: Venture Capital and Private Equity Module (Intermediate)
• Exam Languages: English
• Exam Questions: 70 Questions
• Time: 120 minutes
• Passing Score: 60%

Exam Course Outline 

The Venture Capital and Private Equity Module (Intermediate) Exam covers the given topics  - 

Topic 1: Understand Private Equity Background

• Evolution of Finance for Business
• VC Funds and PE Funds
• Fund Structure
• Leveraging in Funds
• Forms of Investment by Funds
• J Curve
• Measuring the Performance of Investments and PE Fund

Topic 2: Getting Ready for Growth Capital from Funds

• PE Investment Criteria
• Role of Facilitators
• Resource Mobilization, Valuation & Dilution

Topic 3: Learn about Business Model, Business Plan & Financial Model

• Business Model
• Business Plan
• Financial Model

Topic 4: Understand Buyouts and other Transactions

• LBO
• MBO
• Project-based Funding Transactions
• Distressed Assets Funding Transactions

Topic 5: Learn about PE Investment Process

• Sourcing of Proposals
• Initial contact / Flier
• Non-Disclosure Agreement (NDA)
• Information Memorandum
• Management Presentation
• Initial Due Diligence
• Preliminary Investment Note
• Non-binding Letter of Intent
• Final Due Diligence
• Final Investment Memorandum
• Signing the Term Sheet
• Closure of the Deal

Topic 6: Learn about Documentation and Typical Investment Conditions

• Typical Investment Conditions
• Subscription Agreement
• Shareholders’ Agreement

Topic 7: Understand Tax Aspects of PE Investment

• Section 10(23FB) of Income Tax Act, 1961
• Section 10(47) of Income Tax Act, 1961
• Income Types
• Securities Transaction Tax (STT)
• Tax on Distributed Profit (Dividend Distribution Tax)
• Taxability of Interest
• Taxability of Short Term Capital Gains on Debt
• Taxability of Long Term Capital Gains on Debt
• Taxability of Short Term Capital Gains on Equity
• Taxability of Long Term Capital Gains on Equity
• Taxation of Non-Residents

Topic 8: Understand Post-Investment Support, Monitoring and Exit

• Support
• Monitoring
• Exit

Topic 9:  EMERGE: NSE’s Platform for SMEs

• Emerge Introduction
• Benefits of Listing for Companies
• Benefits of Listing for Investors
• Eligibility Criteria
• Listing Requirements
• Listing Fees
• Selecting a Merchant Banker for the Issue
• Role of Merchant Bankers in Emerge
• Role of Market Makers in Emerge
• The Emerge Trading Platform