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.
Put more specifically, the investors know that they are either going to make a ton of money or possibly none. Most of the companies the fund invests in will fail, but it only takes one to go public to create a huge return.
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.
The first thing to realize is the clock starts running when you cash the check. A VC firms wants action. That means selling or taking the company public in five years or so. You are going to be under pressure to produce and produce now.
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.
What if things look to be going off the expected path to success? The venture capital firm can become very predatory. They may withhold money or demaind changes to the company including even booting you out.
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!
So what should you do? Well, it is up to you. Venture capital is a high risk, high reward game. If you want to play with the big boys, it is a necessity. If you are uncomfortable with such pressure to perform, pass it by. - 15246
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.
Put more specifically, the investors know that they are either going to make a ton of money or possibly none. Most of the companies the fund invests in will fail, but it only takes one to go public to create a huge return.
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.
The first thing to realize is the clock starts running when you cash the check. A VC firms wants action. That means selling or taking the company public in five years or so. You are going to be under pressure to produce and produce now.
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.
What if things look to be going off the expected path to success? The venture capital firm can become very predatory. They may withhold money or demaind changes to the company including even booting you out.
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!
So what should you do? Well, it is up to you. Venture capital is a high risk, high reward game. If you want to play with the big boys, it is a necessity. If you are uncomfortable with such pressure to perform, pass it by. - 15246
