Question

What is venture capital? If you were a venture capitalist, what are some of the things you would be looking for in potential investments? If you were a company looking to get venture capitalists to invest in you, what are some of the things you would consider when choosing among competing venture capital firms?

Answer 1

Venture capital is type of fund raise private company in its initial stage of business. Venture capital is provided by private institutional investor who invest in company because of higher growth prospective of company in future. The venture capital provider is called Venture capitalist or Angle investors. Primary Goal of venture capitalist is to earn higher return on their investment.

A Venture capitalist looks growth prospective of comapny they are investing in and future potential return on their investment before making investment. Since, level of risk in venture capital investment is so high, so venture capital company wants very high return on their investment.

A company while choosing venture capital for investment, looks the investment amount by venture capital and proportion of ownership in comapny they wants for making investment. They also looks the term and consition of venture capital for providing funds like, total amount they can disburse propartion of ownership, royalities in company.