Venture Capital and Its Characteristics
Venture capital firms are made up of individual investors or corporations. Sometimes the participants are institutional investors like insurance companies, foundations and pension funds. Aside from these firms, there is also what is called as angel investors. These are individuals or a smaller group of investors that operate the same way as venture capital firms. They all function the same way, and that is to fund small and starting businesses, ending in a buyout, merger or IPO.
Finding start up capital is not easy. First, you need to fit in the investment criteria that these firms provide. There are several of them listed in directories or the internet. The line of business that you have in mind should match that of the firm.
Otherwise, there is lesser chance for your proposal to be approved. Also, you need to have a business proposal that would persuade the firm. It must be concise, well-written and well-researched. With the hundreds of proposals that they get, it is crucial that yours should impress them.
Venture capital investments are different from venture capital loans. For the latter, the risk is borne by the investor and not by the investment firm. The entrepreneur must repay the amount plus interest, regardless of the company's success or failure. For venture capital investment, it is the firm that bears the risk. This explains why more people opt for venture capital investments than loans.
Since the firm bears the risk, it is therefore the one entitled to a major part of the profits. These investors seek maximum gain at the shortest period possible. They're eyeing on at least a 100%, even 700%, return of their investment. That is why they tend to have more control over the company than its entrepreneur. If you have problems with relinquishing control over the company, then this scheme is definitely not for you.
The good news, though, is that these capitalists are experts in the business field. Their policies and strategies have already been tried and tested. Should any of their plans fail, they are sure to have back-up or alternative plan. In other words, these people know more than the new entrepreneur and can help a great deal in the management of the company.
Knowing the characteristics of venture capital may prove to be useful to any businessman. With this simple guide, you will have a glimpse of what it's like and what to expect from it. This should be the first question that any aspiring entrepreneur should ask: is this right for my business? Venture capital is not fit for everyone.
If you do not fully understand what it is and how it works, then you might as well not consider it – yet. Learn more about the topic by reading more articles and acquiring more information. If it has worked for others, then there is no reason why it shouldn't work for you too.
Comments
Menu
My Articles
Venture Capital And Its CharacteristicsVenture Capital – Knowing Your Funding Options
How To Raise Venture Capital Funding
What Is A Venture Capital Course?
What Do Venture Capitalists Want?
Venture Capital – Things That You Should Know
Pitfalls To Avoid In Applying For A Venture Capital
Venture Capital Firms In New York: Chase Your Dreams
Venture Capital Fund: A Viable Risk?
Making A Difference With Non-Profit Venture Capital
What Is Venture Capital Fund?
Advantage In New Orleans: Capital For The Underdogs
How And Where To Find Venture Capital Insurance
Venture Capital: The Basics
What You Need To Apply For A Venture Capital
Kinds Of Venture Capital Jobs
Kinds Of Venture Capital Firms And What They Do
Venture Capital And Grants – Is It Right For Your Business?
What The Definition Of Venture Capital Won't Tell You
Sources Of Venture Capital News
Choosing The Best Venture Capital Consultant
Venture Capital Cycle – How Does It Go?
The Advantages Of Taking Venture Capital Courses
Astellas Venture Capital: Aim Big
Related Sites | My Articles Venture Capital: The Basics A lot us have ideas, but the real challenge is making them.. Venture Capital And Grants – Is It Right For Your Business? You've heard of some companies which were put up through.. Choosing The Best Venture Capital Consultant Finding a venture capital firm can be a taxing job. Imagine having to go through.. Venture Capital And Its Characteristics More businessmen are getting into venture capital. Whether.. |
|
|
Related News:
|