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Venture Capital – Things that You Should Know "Venture capital" is a term that is often heard in business discussions. But more often than not, the more common belief is that this is rather complicated and difficult to understand, especially for those who are new in the game of business. For entrepreneurs and anyone who may be interested to get into business, it is important to understand what this is all about. Venture capitalists and firms are composed of people and firms that have pooled in their resources in order to invest in businesses, whether to start-up financing or for company expansion, for the purpose of earning profits within a short period of 3-7 years. The goal is to increase the company's value so as to yield more profit at its exit, which may be an initial public offering or what is commonly known as IPO. Other exits include an investor's buyout, a merger, or an acquisition. These firms concentrate on a certain field or area. It is therefore important that you know what these areas are. This is called investment criteria. If you have a specific area in mind which does not match that of the firm, there are many other firms that you can find. You just have to know where to look. The web is one source of venture capital firms. Make a search on the internet. Some sites are helpful enough to provide listings of these firms as well as other tips such as how to draft your proposal, how to raise venture capital, among others. When you've found the investor to match, it is then time to draft your proposal. It should be truthful, direct and thorough. You might want to ask a professional to check on your proposal before submitting it. Your proposal should leave a mark in the minds of the capitalists, since they have to go through tons of them. An estimate of 1 in every 400 proposals gets approved, so it is imperative that your proposal be impressive. When we talk of profit and earnings, we're not talking of a few thousand dollars in a year. These firms seek a return of up to five, even ten, times the initial investment, not to mention the management fees and other fees that they require. This explains why these firms tend to take the reins of the company. That is why it is important that you organize a solid management team that knows what they're doing and at the same time is able to handle the pressure from these capitalists. But while it helps if you appear to manage the company well, it is still important to listen and follow the strategies that these firms provide. Aside from being tried and tested policies, following their decisions will also benefit you in the long run should you need more capital. Venture capital is a wise investment alternative for both entrepreneurs and capitalists. You and the investment firm have a common goal, and that is to receive as much profit as possible after a short period of time. If this is not what you want or does not seem feasible to you, then there are other financing options that you can avail of. The important thing is to weigh all pros and cons before deciding anything. |
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National Venture Capital Association Moves to Hijack Federal Small Business Contracts, According to the American Small ... (PR Newswire via Yahoo! News)The National Venture Capital Association (NVCA) has blanketed the Congressional small business committees with generous campaign contributions in an attempt to have legislation passed which will allow the nation's wealthiest investors to cash in on government contracts earmarked for small businesses. Read more...Stematix Enters into Negotiations with Greek Venture Capital Fund G.I.V.E. - TANEO for Funding of Stem Cell Banks and ... (Business Wire via Yahoo! Finance)HOUSTON----StematixTM, Inc., a regenerative medicine technology and solutions provider positioned to accelerate safe and effective global use of stem cell therapies, announced today that it has entered into financing negotiations with a Greek venture capital fund, GloCal Investment Ventures Enterprise , funded in part by a Greek government backed fund of funds and managed by GloCal Systems ... Read more...Baird exceeds investment goal for venture capital fund (Small Business Times)Baird Venture Partners (BVP), the venture capital group of Baird Private Equity, announced today it has raised more than $170 million in committed capital for its third venture fund (BVP III), exceeding its target of $150 million. Read more...The Valley's private equity hype [Venture Capital] (Valleywag)It's late, I'm tired and the coffee is wearing off, so I'm happy that Paul Kedrosky takes a stab at deciphering the latest quarterly report on Bay Area venture capital activity from Fenwick & West: ... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Read more...It's Still Possible to Get Venture Capital (Louisville Courier-Journal)Looking for venture capital for your small business? Well, the good news is that venture capitalists are still making investments despite the economy. On the flip side, they're being choosy about the types of companies they'll invest in, say experts. Read more... |
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