When a venture capitalist takes the decision of investing in a small company, he or she does so after carefully studying the business plan for a period of up to 3 years. Generally the offers that enter this process are those that are different and innovative with a high potential for success. Venture capital funds follow a different set of rules than those established by banks. For instance, a venture capitalist will give great importance to the documents presented, the experience and profile of the entrepreneur, the idea of the business and the product it will offer to the market, and of course its innovative qualities.
Venture capital is obtained after going through a complex process. Depending on the kind of venture capital we are talking about, the investor may choose to buy shares (ordinary or preferred), or agree to receive advances on their bank accounts.
The purpose of venture capital is not to be invested in a company indefinitely. For the beginning, the investors agree to stay in the company for only a limited period of time. Investors receive their dividends back after reselling their shares to other companies, or when the company itself buys them from them, or when other types of capital investment enter the company.
The capital gains that the venture capitalists obtain come essentially from the sale value of the shares they bought. The risks they take are: never being able to sell the shares, or losing everything if the company disappears.
Let us now talk about who these investors are. Venture capital is implemented by individuals known as angel investors, by venture capital companies, venture capital funds specializing in capital creation.
The question is now how to choose your investor. The choice of the investor depends on several criteria:
The intervention stage: the business is involved in it partition, creation, development or recovery?
Also, investors will want to know whether the business will be a public, private or semi private entity. This information will be of more or less interest to the investor depending on their choice.
Minimum and maximum amount granted: there is no need to contact a speaker funds from 1million Euros while your need for investment is estimated at 200,000.
Areas: some funds are specialized. It is interesting for an entrepreneur to seek a specialized fund because it could benefit from some expertise and addresses from investors. Geographic coverage: some structures occur only at a regional scale
Venture capital is obtained after going through a complex process. Depending on the kind of venture capital we are talking about, the investor may choose to buy shares (ordinary or preferred), or agree to receive advances on their bank accounts.
The purpose of venture capital is not to be invested in a company indefinitely. For the beginning, the investors agree to stay in the company for only a limited period of time. Investors receive their dividends back after reselling their shares to other companies, or when the company itself buys them from them, or when other types of capital investment enter the company.
The capital gains that the venture capitalists obtain come essentially from the sale value of the shares they bought. The risks they take are: never being able to sell the shares, or losing everything if the company disappears.
Let us now talk about who these investors are. Venture capital is implemented by individuals known as angel investors, by venture capital companies, venture capital funds specializing in capital creation.
The question is now how to choose your investor. The choice of the investor depends on several criteria:
The intervention stage: the business is involved in it partition, creation, development or recovery?
Also, investors will want to know whether the business will be a public, private or semi private entity. This information will be of more or less interest to the investor depending on their choice.
Minimum and maximum amount granted: there is no need to contact a speaker funds from 1million Euros while your need for investment is estimated at 200,000.
Areas: some funds are specialized. It is interesting for an entrepreneur to seek a specialized fund because it could benefit from some expertise and addresses from investors. Geographic coverage: some structures occur only at a regional scale
About the Author:
Wade Henderson - recognized Professional - 15 yrs in the Business Finance Field - strong reputation for getting the deal done. IMMFinancial.com venture capital private equity venture capital jobs Grab a totally unique version of this article from the Uber Article Directory
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