jimtumbo


I have a brilliant business plan and company structure to put into operation and I am not sure how to get the capital for such a venture since my credit is not great.

3 Kids!!Going Crazy!! &Loving IT


… Venture Capital Firms and Finance Companies

And I cant seem to find a simple worded explanation of the difference between them.

TexasFrank


Hi well i’m planning to start my own business soon, i have my plan down and everything, i just need two things, location and money to to start

i was thinking i’d either get a small business loan from a bank, but i think i might need about 250,000 or more,

or should i go with an angel investor, or VC investor (venture capital)

anyone ever start where i’m at

john j


who is interested investing in a startup venture? capital, talent and other resources are needed. the interactive game is targeted to 1 to 8 year old kids and is requires physical exercise. kids play with it for hours without stop.

f5kansas


I’m really interested in moving into private equity, venture capital, or mutual fund allocation strategy…possibly commercial strategy work. What are the best schools for breaking into these fields?
Great answers/suggestions so far…experience wise I had three internships at top places during college, so with that included its probably more like 3 years experience (if it counts). The 3.4 is actually a 3.44 and my major gpa was 3.55 and this was at one of the top 3 undergrad b-schools in the country. I also have a TS/SCI clearance. Not sure if any of this would help me, but just wanted to put all the facts out there.

tcongdon24


I handle equipment leasing, business loans, venture capital, credit card processing and ATMs. I was wondering what is the best form of advertising?

nikki


Since I’m not putting up any of the capital in order to make the business run efficiently, how much of the profit should I demand?

Dennis Robertson




Venture Capital is a specific term that refers to funding obtained from a venture capitalist. These are professional serial investors and may be individuals or part of a firm. Often venture capitalists have a niche based on business type and or size and or stage of growth. They are likely to see a lot of proposals in front of them (sometimes hundreds a month), be interested in a few, and invest in even fewer. Around 1-3% of all deals put to a venture capitalist get funded. So, with the numbers that low, you need to be clearly impressive.

Growth is usually associated with access to, and conservation of cash while maximising profitable business. People often see venture capital as the magic bullet to fix everything, but it isn’t. Owners need to have a huge desire to grow and a willingness to give up some ownership or control. For many, not wanting to lose control will make them a poor fit for venture capital. (If you work this out early on you might save a lot of headaches).

Remember, it’s not just about the money. From the perspective of a business owner, there is money and smart money. Smart money means it comes with expertise, advice and often contacts and new sales opportunities. This helps the owner, and the investors grow the business.

Venture Capital is just one way to fund a business and in fact it is one of the least common, yet most often discussed. It may or may not be the right option for you (a discussion with a corporate advisor might help you decide what is the right path for you).

Here’s a few other options to consider.

Your Own Money – many business are funded from the owner’s own savings, or from money drawn from equity in property. This is often the simplest money to access. Often an investor would like to see some of the owner’s fund in the company (“skin in the game”) before they’d consider investing.

Private Equity – Private Equity and Venture Capital are almost the same, but with a slightly different flavour. Venture Capital tends to be the term used for an early stage company and Private Equity for a later stage funding for further growth. There are specialists in each area and you’ll find different companies with their own criteria.

FF & F - Family, Friends and Fools. Those closer to the business and often not sophisticated investors. This type of money can come with more emotional baggage and interference (as opposed to help) from its providers, but may be the fastest way to access smaller amounts of capital. Often multiple investors will make up the overall amount needed.

Angel Investors – The main business angels vary from venture capitalists in their motives and level of involvement. Often angels are more involved in the business, providing ongoing mentorship and advice based on experience in a particular industry. For that reason, matching angels and owners is critical. There are substantial easily locatable networks of angels. Pitching to them is no less demanding than to a venture capitalist as they still review hundreds of proposals and accept only a handful. Often the demands around exit strategies are different for an angel and they are satisfied with a slightly longer term investment (say 5-7 years compared to 3-4 for a venture capitalist).

Bootstrapping – growing organically through reinvesting profits. No external capital injected.

Banks – banks will lend money, but are more concerned about your assets than your business. Expect to personally guarantee everything.

Leases – this may be a way to fund particular purchases that allow for expansion. They will normally be leases over assets, and secured by those assets. Often it is possible to lease specialist equipment that a bank would not lend on.

Merger / Acquisition Strategy – you may seek to acquire or be acquired. Generally even a merger has a stronger and a weaker partner. Combining the resources of two or more companies can be a path to growth – and when it is done with a company in the same business, can make a lot of sense – on paper at least. Many mergers suffer from differences in culture and unforeseen resentments that can kill the benefits.

Inventory Financing – specialist lenders will lend money against inventory you own. This may be more expensive than a bank, but might allow you to access funds you could not have otherwise.

Accounts Receivable Financing / Factoring – again a specialist area of lending that may allow you to tap into a source of funds you didn’t know you had.

IPO – this is normally a strategy after some initial capital raising and having proven a business is viable through the development of a track record. In Australia there are various ways to “list”. They are useful for raising larger amounts of money ($50m and up) as the costs can be quite high ($1m plus).

MBO (Management Buy Out) – This tends to be a later stage strategy, rather than a startup funding strategy. In essence debt is raised to buy out the owners and investors. It is often a strategy to gain back control from outside investors, or when investors seek to divest themselves from the business.

One of the most important things to remember across all these strategies is that they all require a significant amount of work in order to make them work – from the way the business is structured, to dealings with staff, suppliers and customers – need to be examined and groomed so that they make the company attractive as an investment proposition. This process of grooming and derisking can take anywhere from three months to a year. It is often costly both in actual expenses (consultants, legal advice, accounting advice) as well as changing the focus of the owners from “sticking to the knitting” and making money within the business to a focus on how the business presents itself.

Buck Ofama


http://www.ibdeditorials.com/IBDArticles.aspx?id=325899798635675

Last May, we noted that Big Al had joined the venture capital group Kleiner Perkins Caufield & Byers the previous September. On May 1, 2008, the firm announced a $500 million investment in maturing green technology firms called the Green Growth Fund.

AnnaBelle


What typically are management fees (both management and incentive fees) for pooled investment vehicles, such as private equity pools and limited partnerships? I read in Wikipedia the “2 and 20″ rule, with 2% management fee on total assets and 20% of total return, for both the Hedge Fund and the Venture Capital definition. However, I was not certain that was universal, or just what Wikipedia contributors came in with. Thank you.