What is Venture Capital?
Venture Capital Financing
If you're considering starting a business, you likely have thought about where you'll get the money for your new startup. Some of the more obvious venues to obtain the necessary money for your startup are bank loans and personal savings. Of course, if you're not wealthy, if your credit is less than perfect, or if you have nothing to put up as collateral for a loan, these options are probably out of the question. So what do you do if you have a great mind for business and a fantastic business idea, but you have no viable means of pursuing your dream? The answer for many new businesses these days is venture capital. It's a term you've likely heard before, but what does it mean? Just what is venture capital? Who are these people who call themselves venture capitalists? Where does the money come from? And who can be the recipient of venture capital? Below is information, straight from venture capitalists such as Efraim Landa, which can help you decide if venture capital is a viable answer to your money issues for your new startup.
What is VC?
Naturally, when endeavoring to start a new business, the first thing you need (after a great business idea and a whole lot of good old-fashioned gumption) is money. You have to pay for all those things that will get your business off the ground. You'll likely need computers, furniture, a place to do business, supplies, and of course, people to do the work, and this list is in no way comprehensive. If you don't have a huge stash of cash or a credit line to tap into when you need capital, you might want to consider venture capital, a means of obtaining large amounts of money you can use to start and grow your business. You may even get enough to grow your business quickly, depending on what category your business fits into. Venture capitalists such as Efraim Landa fund startups whose business ideas interest them.
How does VC work?
Venture capitalists use funds, or pools of money, to invest in business startups, typically those that fit into categories that interest them or even in which they possess expertise. For instance, a VC firm might be looking to invest part of its fund (which often contains millions to hundreds of millions of dollars) in startups whose business proposals include clean energy. When this firm finds a number of startups (sometimes 10 or more), they raise a fixed amount of capital to put into the fund and invest into these new businesses. Such a VC firm may also search for a mix of startups that coincide with its investment profile. Such a profile may include varying startups such as clean energy, medical devices, pharmaceutical supplies, and dot coms. Whatever startups the VC firm has chosen for its investment fund, the risks are often high, meaning that the returns could be large. When the investments have been put into various startups, the VC firm typically anticipates that liquidation of such investments will be made in less than 7 years, meaning that the firm forecasts these startups to sell shares on a stock exchange (also referred to as 'going public') within that time. Such startups can also be acquired by other companies within that time, and either of these situations will then allow the VC firm to cash out its investment, thereby placing that capital back into the fund for subsequent investment in new startups. Venture capitalists and VC firms also may have a certain amount of knowledge, experience, or expertise in the types of startups they invest in, and they can even lend this knowledge to the startups in which they have chosen to invest.
How can you get VC?
If you've got a startup with a cutting edge business idea, you may be able to get venture capital. But you can't get venture capital without a solid business plan. If you don't know how to write a really good business plan, and if you don't know how to pitch your idea effectively, contact a business coach or take relevant business classes in order to be able to present your startup's idea as persuasively as possible. It also helps if you have proven experience. If you're a novice to business, you'll need to find partners who not only possess the knowledge and experience you need to obtain your venture capital, but you'll also want partners who have a proven track record. Finally, find venture capitalists who are looking for ideas that are similar to yours in which to invest their capital.
If you're considering a new startup but you don't know where to find the funds necessary to start and grow your business, venture capital may be a viable solution. America is only the 'land of opportunity' if opportunity exists for all, regardless of how much money they already have in the bank. And, thanks to venture capital and venture capitalists like Efraim Landa, your ticket to that opportunity could be just a venture away.
What is VC?
Naturally, when endeavoring to start a new business, the first thing you need (after a great business idea and a whole lot of good old-fashioned gumption) is money. You have to pay for all those things that will get your business off the ground. You'll likely need computers, furniture, a place to do business, supplies, and of course, people to do the work, and this list is in no way comprehensive. If you don't have a huge stash of cash or a credit line to tap into when you need capital, you might want to consider venture capital, a means of obtaining large amounts of money you can use to start and grow your business. You may even get enough to grow your business quickly, depending on what category your business fits into. Venture capitalists such as Efraim Landa fund startups whose business ideas interest them.
How does VC work?
Venture capitalists use funds, or pools of money, to invest in business startups, typically those that fit into categories that interest them or even in which they possess expertise. For instance, a VC firm might be looking to invest part of its fund (which often contains millions to hundreds of millions of dollars) in startups whose business proposals include clean energy. When this firm finds a number of startups (sometimes 10 or more), they raise a fixed amount of capital to put into the fund and invest into these new businesses. Such a VC firm may also search for a mix of startups that coincide with its investment profile. Such a profile may include varying startups such as clean energy, medical devices, pharmaceutical supplies, and dot coms. Whatever startups the VC firm has chosen for its investment fund, the risks are often high, meaning that the returns could be large. When the investments have been put into various startups, the VC firm typically anticipates that liquidation of such investments will be made in less than 7 years, meaning that the firm forecasts these startups to sell shares on a stock exchange (also referred to as 'going public') within that time. Such startups can also be acquired by other companies within that time, and either of these situations will then allow the VC firm to cash out its investment, thereby placing that capital back into the fund for subsequent investment in new startups. Venture capitalists and VC firms also may have a certain amount of knowledge, experience, or expertise in the types of startups they invest in, and they can even lend this knowledge to the startups in which they have chosen to invest.
How can you get VC?
If you've got a startup with a cutting edge business idea, you may be able to get venture capital. But you can't get venture capital without a solid business plan. If you don't know how to write a really good business plan, and if you don't know how to pitch your idea effectively, contact a business coach or take relevant business classes in order to be able to present your startup's idea as persuasively as possible. It also helps if you have proven experience. If you're a novice to business, you'll need to find partners who not only possess the knowledge and experience you need to obtain your venture capital, but you'll also want partners who have a proven track record. Finally, find venture capitalists who are looking for ideas that are similar to yours in which to invest their capital.
If you're considering a new startup but you don't know where to find the funds necessary to start and grow your business, venture capital may be a viable solution. America is only the 'land of opportunity' if opportunity exists for all, regardless of how much money they already have in the bank. And, thanks to venture capital and venture capitalists like Efraim Landa, your ticket to that opportunity could be just a venture away.