expand your business
Venture capital is a possible source of
funding for new, relatively unproven
enterprises that appear to have promising
futures. However, such money is often hard to
Be realistic in your quest for venture capital.
Venture capital firms expect a business to be able
to return their investment not only with interest,
but with a large profit.
Many venture capital firms are affiliated with
banks, insurance companies, other financial
institutions and large corporations. Some are
owned by individuals or private groups of
investors and a few are publicly held.
Once you accept venture capital, you have
relinquished some of your autonomy and
accepted the understanding that the venture
capital firm will take a large share of the profits
you earn. As an entrepreneur, you should
understand the nature of a vendor firm, before
pursuing this as a financing source. This type of
investor expects a projected return on Investment
that is directly related to risk.
The greater the risk, the greater the return
expected. Typically however, an investment firm
will not be interested in getting involved with a
new firm until the business has established itself
in some way, so the risk factor can be determined.
The venture capital firm and its interest usually
depends upon the stage of the new firm’s
development. Once the new firm has established
itself and has a working organizational structure,
a viable business plan and start up arrangement
a venture capital firm may be interested.
However, some firms prefer a later stage of new
business development, perhaps when the new