Question

venture capital is decreasing due to the impact of the pandemic. How startups and small companies look for funding options to sustain their business?

Answer 1

Venture capital is generally decreasing due to pandemic as there is a risk of an impending recession in the emerging Markets and at these times of credit crunch,the smaller companies are not able to sustain so there is a high risk of liquidation of the capital so this venture capital finance methods are slowing down at the time the pandemic.

startups and small companies look for funding option to sustain their business through a large number of equity options and they will be including venture capital financing and private equity funds along with internet financing and they can also look for bank loans.

Venture capital financing will generally be providing them with a large amount of capital and it is also a highly beneficial method because these venture capitalist are highly exposed and their have an expertise and they are known for investing into a large number of business so they are well aware of the operations of the company so these venture capitalist can provide you with the expertise also rather than providing just money so this venture capitalist will be trying to support the business and the entrepreneur and they will be trying to manage the risk.

Private equity players are also providing a large chunk of money to the start-up capital as they are trying to maximize the overall capital appreciation by taking a equity ownership into the company and they are trying to maximize their overall stake through better participation in the management and providing the management with supportive advices.

internet funding is a new type of funding through which startups are trying to generate funds through internet and these are highly transparent processes and they are highly rapid in nature so they are helping the small businesses in order to finance themselves.

Bank loan is the most traditional method which will be a form of debt capital is and they may be risky at times because of their fixed nature of payments but those businesses who are highly financing in order to help themselves to acquire large number of market share because they are generating profits.