What Are Venture Capitalists
A venture capitalist (VC) is a person who provides equity financing to companies with high growth potential. The money that a venture capitalist invests in a company is called venture capital. Venture capital firms are often limited partnerships that comprise a few venture capitalists. Each venture capital firm manages a venture fund, which is often comprised of a large pool of money--anywhere from $25 million to $1 billion--that the firm invests in growth companies. A venture capital fund consisting of third-party investments can finance enterprises that are too risky for debt financing. Each VC firm invests in several companies and this group of companies is called the firm’s portfolio companies or portfolio...continue
Invest Capital When You Have It
One very popular method in which people can earn extra income and build a considerable amount of wealth overtime is to invest capital. What was once an opportunity that was thought to be available to only the exclusively rich is now a fairly common trend among many mainstream Americans. However, if an individual is considering the opportunity to invest capital, one should be aware of many different things that can maximize the investment. First, one should work meticulously to reduce any existing debt and improve one’s credit score. Second, one should make an effort on a daily basis to save money. This can be accomplished by monitoring spending and using the available capital in various financial vehicles...continue
Advantages and Disadvantages of Leveraged Buyout
A leveraged buyout or LBO is a type of aggressive business practice whereby investors or a larger corporation utilizes borrowed funds (junk bonds, traditional bank loans, etc.) or debt to finance its acquisition. Both the assets of the acquiring corporation and acquired company function as a form of secured collateral in this type of business deal. Often times, a leveraged buyout does not involve much committed capital, as reflected by the high debt-to-equity ratio of the total purchase price (an average of 70% debt with 30% equity). In addition, any interest that accrues during the buyout will be compensated by the future cash flow of the acquired company...continue
Venture Capitalism in 2008/2009 During the Economic Downturn
In the first quarter of 2008, venture capital remained strategically strong despite the failing economy. However, by the end of that year, there seemed to be an overall change in the trend of those investments. Though VCs were still actively investing, they approached investments more prudently and at a much slower pace...continue
Where Venture Capitalism is Heading in 2009-2010
Just as today’s down economy has changed the way in which angel investors conduct their business dealings, venture capitalists have also taken prudent steps to ensure that their investments survive. The recession has clearly affected the manner and pace in which VC investments are made, and there is no doubt that a sluggish economy will bring with it rather bleak investing as well...continue
What Do Venture Capitalists Look For?
Venture capitalists generate profits by providing equity financing to startups that have high growth potential. Venture capitalists buy the equity of a startup and liquidate their shares either through an IPO or through an acquisition. Given this situation, the growth potential and the risk factor of the startup critically determine the profits VCs generate. The success of a startup depends on a number of factors. Venture capitalists carefully examine each factor before they decide to fund the startup...continue
Raising venture capital for your new business - Venture Capital Funding
Raising venture capital for your new business can be a tiring and frustrating process. There are numerous options available that can help you raise the venture capital needed to get your business up and running. From stopping by your local bank to asking friends and family members for a loan, finding funding for your new business can be easy if you know where to start. The first place you should start when you finding funding for your new business is to have a strong business plan already drawn up. This will allow you to impress any potential creditors and investors that you have thought long and hard how your company will be fun. Your business plan will also better explain to these people what type of financial structure you will have and how soon you will be making money. This will come in handy since they will want to know how soon you will start making payments on the loans you have acquired...continue
Popular misconceptions about Venture Capitalists
Entrepreneurs approach venture capitalists to raise equity financing. Venture capitalists then fund the entrepreneurs and become partners. As partners, venture capitalists will have a say in the direction of the company. At times, this might make entrepreneurs skeptical of venture capitalists true intentions. Whenever entrepreneurs think of getting a venture capitalist on board, they tend to be suspicious at a subconscious level and fear unforeseen ramifications. Entrepreneurs generally have the following questions in mind when they approach venture capitalists:..continue
Frequent Lies Of Venture Capitalist (VCs And Equivocations)
Venture capitalists fund different varieties of businesses. Though reviewing a business idea and evaluating its implementation takes time, they must eventually arrive at a decision as to whether they will fund the entrepreneur or not. However, they may equivocate with entrepreneurs, refusing to offer a straightforward “yes” or “no” about whether or not they will fund the start-up business. Entrepreneurs must take care when dealing with venture capitalists; while getting a “yes” answer might take a good deal of time, the entrepreneurs must be certain, after a length of time has passed, that they receive a response in either direction...continue
List of Venture Capital Firms
Are you Looking for venture capital investors? We have compiled list of venture capital investors and links to their website. Please suggest venture capital investor firms, or venture capital investor group to add to the list..continue
Venture Capital Partners And Knowing Where To Start
Are you looking for venture capital partners but do not know where to start? If you have a great business idea, something you think will revolutionize the field you are interested in conquering, but do not have the necessary funds at your disposal, then choosing the best venture capital partners is something you need to be doing. Your venture capital partners will have to be people which strongly believe in your project, which are willing to risk a lot financially in order to make it happen and which will not be reluctant to provide you with an infuse of capital, should there be a need to. Obviously, venture capital partners will want something in return since they share your risks. In this case, they will also want to share the rewards and will ask for a percentage of all profits your company will be making in the future...continue
Basic Information About Venture Capital Funding
VC funding represents financial investment in a highly risky proposition in the hope of earning a high rate of return. Venture capital has an important role in the financing of startup and early businesses, as well as businesses in turn around situations. The main sources of VC funding for a company consist of equity capital, preference capital, and debenture capital and term loans. Equity capital means ownership capital in which equal shareholders collectively own the company, enjoying the rewards and at the same time facing the multiple risks of the ownership. However their liability is limited to their capital contributions...continue
Source Of Funding For Vcs
Venture capitalists invest in several projects at a time and most of them invest in large projects worth a few million. Most venture capitalists get their money from various institutional and pension fund investors. Like other investors, venture capitalists also go through a process of raising funds. They do this by raising funds from foundations, endowment funds and retirement funds. Venture capitalists then divest these funds into companies that they think will grow to make a profit. Most VCs try to invest in several businesses at a time to limit their risk. Venture capitalists look for big returns on their investments and are usually very selective about the projects in which they invest...continue
Learning The Terms Of Venture Capital Funding
VC funding is one of the most popular options for almost all new business owners. Despite a slump in the market a few years ago, there continue to be several sources of VC funding. However, before applying for VC funding, business owners should know the basics of the funding system and how it functions as well as when to seek the funding. New business owners should also know which areas the venture capitalist specializes in. A lot of VC funding is currently being used to set up biotech, medical instruments, health care, retail, computers, software, networking, and the Internet firms. VC funding is usually invested in accordance with the strategic plans of the company...continue
Raising Venture Capital Funding For Your New Businesses
Raising venture capital for your new business can be a difficult process for anyone looking to start a business. With so many startup capital options available, it is important you research the opportunities available to find the one that works the best for you. No matter what type of venture capital you are looking at, you need to be sure you have a thorough business plan established so you have documented answers to any questions that may be asked by your potential creditors. One option to raise venture capital for a new business is to visit your local financial institution. When you are going there you will need a well-drafted business plan, accurate cash flow projections, a description of the collateral for security, the debt-to-equity ratio, your financial history and personal and business credit profiles...continue
How Venture Capitalists View Business
Venture capitalists are essential to any industry. They are essential in helping new businesses grow and become profitable. Venture capitalists are always on the lookout for opportunities which have the potential of yielding promising long-term returns. They are not interested in businesses which are already on track and profitable. When there is a business to be restructured or a new idea to be materialized, you can count on venture capitalists being there with the necessary capital. In order to understand how venture capitalists view and approach business, it is imperative that the concept of venture capitalism is clearly understood...continue
The Benefits Of Venture Capitalists
So you are serious about starting a new business and have been thinking of using the help of venture capitalists and VC funding. More and more new business owners have been exploring the benefits of using venture capitalists to provide the startup capital to get the company going. Venture capitalists provide funding as a type of investment that is offered by to those who are willing to help in the business. This is very similar to getting a loan from the bank since these people will eventually become a strategic partner but at a lower interest rate. There are many ways to get in contact with someone who will agree to VC funding...continue
How To Become A Venture Capitalist
A lot of business graduates are keen on becoming venture capitalists these days. Unfortunately, there is no space available for all prospective venture capitalists out there. To become successful venture capitalists, individuals need a great deal of charisma and some luck. The entire VC industry depends on networking of venture capitalists. Historically, most venture capitalists are seasoned executives looking for a career change or MBAs with several years of experience and a deep knowledge of a specific industry. However, over the past few years most venture capitalists have been recent management graduates who landed themselves jobs in venture capital firms...continue
How Investment Opportunities Build Fortunes
A business investor is in business for the same reasons as any other investor- to make a lot of money. But the reasons that investors invest in different projects is very varied. Entrepreneurs need to analyze the different type of business investors before they approach them with a business plan for financing. In most projects, the entrepreneur is also the first business investor. Before entrepreneurs approach angel investors and venture capitalists they tend to invest in the project themselves. According to a business study, the individual and family can contribute up to 42 per cent of the resources required for a business...continue
How Investment Opportunities Build Fortunes
Is hundreds of dollars worth of capital required in order to invest wisely? Not even close. If you think that a large capital is the only way to achieve high profits through investing and that investment opportunities are not available to people on a lower budget, you are approaching the problem from the wrong perspective. Firstly, you will need to judge all investment opportunities based on your objectives as an investor, which vary from person to person, depending on your goals and aspirations in life. As an investor, you may simply want to retire early and not see your income decrease (in which case, passive investment opportunities are require), or you may want to see your net worth rise above the value most people are confronted with...continue
The History Behind Venture Capitalism
Venture capitalists have a long history of supporting new business ventures in the United States. In fact, since the 1960s, VC funding has been the main source of capital resources for most new businesses. In the early 1960s, the main source of investment for new business ventures was family and friends. Traditionally, individuals, families, or groups of people in tightly knit communities invested their personal assets in new business ventures. These people were called Angels. The functions they perform are very similar to the angel investors of today...continue