| Start-ups have limited business experience and since | | | | venture capitalist is taking a great risk. If a company |
| they are new entities, they do not generate enough | | | | wants to attract investment via venture capital, it |
| confidence to secure a bank loan or complete a debt | | | | has to be well prepared and create a buzz about its |
| offering. Also, they are incapable of raising capital in | | | | product or service as well as business. The |
| the public markets. This is where venture capital | | | | management team should consist of people who are |
| provides the much needed oxygen, the funds, to | | | | highly experienced and even the CV of the |
| sustain the business in the first leg of the operation. | | | | entrepreneur must show extensive experience in the |
| This type of funding is extended to those companies | | | | industry. Additionally, both the entrepreneur and the |
| that show promise, exhibit significant market potential | | | | management should exhibit high level of enthusiasm |
| and also above average growth rates. Venture capital | | | | and excitement in order to get investment. |
| investing happens in exchange for shares of | | | | Venture capitalists are looking for detailed and |
| ownership and also the company has to give-up | | | | accurate projections for at least five years, and the |
| some control of its business. | | | | entrepreneur must be able to clearly state what will |
| The new companies can be often seen vying to | | | | be the company's worth in the next five years. |
| attract the attention of the venture capitalists. | | | | There has to be a business model ready for the |
| However, only few lucky ones succeed -- the ones | | | | scrutiny of the investing venture capitalist. Most |
| that show exceptional market potential. Venture | | | | importantly, the company should highlight what is |
| capital investing demands high level of professionalism | | | | special about its offering and how its unique and |
| and also a bankable innovative product as the | | | | different from the competitors'. |