After years of thinking about it, you have formed a company. Things are going well. In fact, they are going so well that this could be really big. You are going to need serious cash, which makes venture capital funding an interesting proposition.
So, where do venture capitalists get their money? They actually form private money funds that wealth parties put money into. These funds are considered very aggressive with a hit or miss projection the norm.
What does this mean? They are looking for companies that will go public and produce huge returns on their investments. Imagine getting in on the ground floor for Microsoft and you have the idea.
A venture capital firm will often have a plan and invest in roughly ten companies. You can be one of the companies if you fit the niche they are looking for and have a business idea they find appealing.
How do you become a recipient of venture capital? Well, we are not going to focus on that in this article. Instead, we are going to look at what happens to your company once you have it. This is almost as important as getting it.
You do not just get funded and carry on your merry way. The investment firm is going to want to see the company sold off or go public within four to six years. In short, the clock starts running with the first check and you better be ready.
Another thing to understand is the pace of funding. You do not get one giant check. Instead, you get money parcelled out in stages much like on a construction project.
The first stage is known as the seed money round. It is money used to get the company up and moving. If things go well, another round of funding will be provided at a set date. It is not uncommon for four or five rounds of funding to eventually be done.
If things go well, the venture capital firm will be very friendly. If they go bad, the opposite is true. The firm can put all kinds of pressure on you by refusing to provide further funds, demanding the removal of executives and so on.
At this point, you might be wondering were the firm got all of this levage. Sadly, you gave it to them the minute you took that check. How? In exchance, the VC firm received a sizeable chunk of ownership of the business.
If you really want to make money through a successful business venture, money is going to be a huge issue. Venture capital is the answer to that issue, which is the primary benefit it offers. Many companies have been very happy with it.
With every advantage, there is a negative. With VC, it is pressure to perform. The firm has given you a lot of money and it is going to watch that investment closely. Some people are not phased by this, but others fall apart. Know thyself!
Now you can see how venture capital is a high risk and high reward source of funding. Major companies like Google, Microsoft and Yahoo have used it to get where they are today. Others have fallen by the wayside as well. So, the choice is yours. - 15485
So, where do venture capitalists get their money? They actually form private money funds that wealth parties put money into. These funds are considered very aggressive with a hit or miss projection the norm.
What does this mean? They are looking for companies that will go public and produce huge returns on their investments. Imagine getting in on the ground floor for Microsoft and you have the idea.
A venture capital firm will often have a plan and invest in roughly ten companies. You can be one of the companies if you fit the niche they are looking for and have a business idea they find appealing.
How do you become a recipient of venture capital? Well, we are not going to focus on that in this article. Instead, we are going to look at what happens to your company once you have it. This is almost as important as getting it.
You do not just get funded and carry on your merry way. The investment firm is going to want to see the company sold off or go public within four to six years. In short, the clock starts running with the first check and you better be ready.
Another thing to understand is the pace of funding. You do not get one giant check. Instead, you get money parcelled out in stages much like on a construction project.
The first stage is known as the seed money round. It is money used to get the company up and moving. If things go well, another round of funding will be provided at a set date. It is not uncommon for four or five rounds of funding to eventually be done.
If things go well, the venture capital firm will be very friendly. If they go bad, the opposite is true. The firm can put all kinds of pressure on you by refusing to provide further funds, demanding the removal of executives and so on.
At this point, you might be wondering were the firm got all of this levage. Sadly, you gave it to them the minute you took that check. How? In exchance, the VC firm received a sizeable chunk of ownership of the business.
If you really want to make money through a successful business venture, money is going to be a huge issue. Venture capital is the answer to that issue, which is the primary benefit it offers. Many companies have been very happy with it.
With every advantage, there is a negative. With VC, it is pressure to perform. The firm has given you a lot of money and it is going to watch that investment closely. Some people are not phased by this, but others fall apart. Know thyself!
Now you can see how venture capital is a high risk and high reward source of funding. Major companies like Google, Microsoft and Yahoo have used it to get where they are today. Others have fallen by the wayside as well. So, the choice is yours. - 15485
About the Author:
Visit VentureCapitalInvestmentFirms.com to find out the different types of venture capital available to companies.
