The venture capitalist provides capital to a promising perspective to resell its stake by 5 to 7 years in making a capital gain income. Investors expect a return on investment from 5 to 10 times their bet. Unlike the banker, the investor does not seek collateral but looks closely at the business plan and the people who run the project.
The venture capitalist will carefully analyze all projects that are proposed before making an investment decision. In the end, only 5 to 10% of projects will be selected.
We show you here a few of the elements that venture capitalist consider before choosing projects. These results come from a survey performed on 70 venture capitalists.
Products and Market. It covers aspects relating to the nature of the product and market, the estimated market size, growth and the seasonal nature of the activity.
Strategic and competitive. Criterion relating to the concepts of strategy and competitive dynamics, including the nature and level of competition, power suppliers and distributors, the ability to block the penetration of new entrants
Venture capitalists take into consideration the managerial abilities and leadership skills of the business.
Competence in management. This criterion relates to the organizational and administrative skills, capabilities in marketing, sales and production.
The business also needs to be financially sound and have positive trends of development and return rates.
Venture capitalists also study the conditions under which the funding will be granted. The relationship with the organization needs to be effective, harmonious and convenient for both parts. Investors have to manage their portfolio carefully in order to meet the agreements with the contacts.
These elements are fundamental during the qualifying process that venture capitalists and angel investors undergo in order to prioritize which projects they will provide funding to.
For a venture capitalist the management skills, experience and vision of an entrepreneur are key factors for providing funding. They analyze the personality of the management and their ability to successfully handle the project.
The venture capitalist will carefully analyze all projects that are proposed before making an investment decision. In the end, only 5 to 10% of projects will be selected.
We show you here a few of the elements that venture capitalist consider before choosing projects. These results come from a survey performed on 70 venture capitalists.
Products and Market. It covers aspects relating to the nature of the product and market, the estimated market size, growth and the seasonal nature of the activity.
Strategic and competitive. Criterion relating to the concepts of strategy and competitive dynamics, including the nature and level of competition, power suppliers and distributors, the ability to block the penetration of new entrants
Venture capitalists take into consideration the managerial abilities and leadership skills of the business.
Competence in management. This criterion relates to the organizational and administrative skills, capabilities in marketing, sales and production.
The business also needs to be financially sound and have positive trends of development and return rates.
Venture capitalists also study the conditions under which the funding will be granted. The relationship with the organization needs to be effective, harmonious and convenient for both parts. Investors have to manage their portfolio carefully in order to meet the agreements with the contacts.
These elements are fundamental during the qualifying process that venture capitalists and angel investors undergo in order to prioritize which projects they will provide funding to.
For a venture capitalist the management skills, experience and vision of an entrepreneur are key factors for providing funding. They analyze the personality of the management and their ability to successfully handle the project.
About the Author:
Wade Henderson - recognized Professional - 15 yrs in the Business Finance Field - strong reputation for getting the deal done. IMMFinancial.com capital financing business financing Get a totally unique version of this article from our article submission service
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