| Obtaining the necessary capital for start-ups has | | | | amount of money for early stages of development in |
| become a more difficult process, due to a whole | | | | a company's life cycle, when the chances of |
| host of reasons deriving from the world financial | | | | accessing more traditional sources of capital are very |
| crisis. For those ventures that have already | | | | low. Besides providing funds, Vcs also get actively |
| exhausted personal savings, loans from relatives and | | | | involved in the enterprise with management |
| acquaintances and that have very small chances of | | | | assistance whenever necessary, as they have gained |
| receiving bank loans, there are alternative sources of | | | | expertise with other successful companies in their |
| capital that can be considered. One of these useful | | | | portfolio. Another advantage is the access to a |
| sources is venture capital. | | | | network that may help increase the company's |
| What is Venture Capital? | | | | credibility and transform it into an important industry |
| Venture or seed capital is used to help businesses | | | | player. |
| with a high growth potential and it comes from | | | | What Companies Benefit From VC funds? |
| groups of investors with liquid assets forming | | | | Due to the high risks posed by new ventures, VCs |
| profesionally managed firms. These firms have small | | | | are very selective in choosing where to invest. They |
| teams of specialists with technology backgrounds, | | | | prefer companies that closely match their area of |
| industry experience and business training. The funds | | | | expertise and have the highest return on investment |
| represent pooled investments with multiple sources, | | | | potential. When an entrepreneur decides to contact |
| such as wealthy individuals and institutions. state and | | | | potential investors, being referred by acquaintances |
| private pesion funds, insurance companies, mutual | | | | or using a venture capital database, the key points in |
| funds. | | | | the selection made should be industry preference, |
| What Do VCs Expect? | | | | geographic area and business stage preference. |
| Investing in an early-stage company, that is, an | | | | What Are the Steps? |
| unproven business venture, with no profit history, is | | | | The implementation of the innovative idea should be |
| very risky and highly speculative, therefore only | | | | detailed in a business plan that describes the |
| companies with significant potential for growth are | | | | company's strategies and goals. An executive |
| funded. In exchange for the capital provided VCs | | | | summary of the business plan should be sent as a |
| expect high rates of returns from their portfolio | | | | formal proposal. Only after analyzing the proposal |
| companies. They also require a certain degree of | | | | representatives of funding organizations will accept a |
| control over the venture, such as a seat in the board | | | | face-to-face meeting in the form of a pitch, provided |
| of directors, a percentage of equity ownership and | | | | that they become interested in your business idea. |
| payment of assorted fees. Important corporate | | | | Besides helping small businesses grow, venture capital |
| decisions cannot be made without the investors' | | | | is usually associated with innovation within an |
| approval. | | | | economic sector or geographic area as well as with |
| What Are the Advantages? | | | | job creation. |
| These business investors provide the necessary | | | | |