Question

One of the more difficult issues in the discussion between the entrepreneur and Venture Capital firm is the topic of Control. How are you going to advise your friend on a potential demand coming from the Venture Capital Fund on investing in the firm only upon gaining control in the company?

Answer 1

The selection of the right venture capital firm is very critical for the success of the business because the venture capital firm plays a very important role. It is just like selecting a life partner for the business.
Right venture capital can have many Synergy benefits for the business.
We need to look at venture capitals funding capacity, insights, networks track record it has got.
Because some venture capital is very predatory in nature. That's why they are sometimes called vampire capital or vulture capital firms.

These are some important benefits of venture capital:
1. Long term Finance with no legal liability of interest payments.
2. Venture capital is a business partner sharing risk and rewards.
3. Venture capital can act as advisors, owing to enormous experience.
4. Can help the business to go for an IPO.
5. They can facilitate the strategic sale or secondary sale of the business at good valuations.

So advise would be looking at the track record of venture capital firm, analyse their nature. If the firm has a good track record then It's a good idea to have a venture capital as a business partner.