Tag: venture capital

Venture capital is a buzz phrase these days among entrepreneurs. Young companies that have secured business funding from venture capital are seen as rising stars with great potential. And yet, while large initial investments can help a company get off the ground, there are plenty of reasons why bootstrapping may be a better idea. Here are the top three: 1. Autonomy There is no substitute for having total control over your business. It is your brainchild, after all. You are the one who is passionate […]

One of the major aims of the Small Business Administration is to provide access to working capital for qualified new and growing companies. The SBA does not directly lend money to entrepreneurs however. In addition to its SBA loan program, it also offers a venture capital system called the Small Business Investment Company (SBIC.) Here’s what you need to know about this program: The SBIC was established in 1958 by Congress in order to get more financing to growing businesses. It allows […]

Whether you are a potential venture capitalists or a business owner looking for investments, understanding how a typical VC fund charges fees and expenses can help you be more able to navigate the venture capital waters. Management Fees Most VC funds charge an annual management fee, typically 2 percent of the fund’s total dollar amount. This money is paid to the fund’s management team in order to pay for all the overhead associated with running the fund: salaries, benefits, office rent and […]

No new business is devoid of setbacks and challenges. Even companies that go on to make millions of sales and find great success often make many mistakes in the early stages. While some business knowledge can only be learned the hard way, there are a few mistakes that can be avoided by learning from others’ experiences. Here are a three of the top financial mistakes to avoid as a fledging company: 1. Not Having a Cash-Flow Plan Becoming successful takes more than just opening the doors or placing […]

When your business is ready for that next round of funding, you might start looking for angel investors or venture capitalists to help finance your growth. However, the terms are not synonymous – even though they both contribute to your business funding, their motivations and roles are often very different. Here are a few of the main differences: Pay Schedule Venture capitalists (VCs) work for a group of professional investors who all contribute a portion of money to fund many projects. VCs […]

Entering into a relationship with an angel investor can be a huge business funding benefit to a new startup company. A large infusion of cash can go a long way towards purchases of needed inventory, machinery, employee salaries or any number of vital expenses for a growing business. However, angel investors come in many shapes and sizes. Each one is also motivated to invest by many different reasons. Discovering that specific motivation can help you decide if you are partnering with the right angel […]

Acquiring venture capital can be a huge boost for a fledgling business or one ready to move on to the next level. Venture capital is notoriously difficult to obtain however and entrepreneurs are always eager for tips on wooing VCs. A recent study headed by Stanford finance professor Ilya A. Strebulaev got to the bottom of what matters most to venture capitalists when it comes to investing in a new company. The study call “How Do Venture Capitalists Make Decisions?” surveyed 885 venture capital […]

Having enough cash on hand – working capital – to pay for day-to-day operations is essential for creating a successful small business and yet accomplishing that task is actually much tougher than it sounds. It will require some careful thought and planning. THINK BIG Start by making some long-term plans and projections for your business. You need to have a very good estimate of how much money you plan to bring in over the course of a month and during the whole year. You should also think through […]

The world of venture capital is constantly evolving, with investors looking for different products and services. There are a few things that tend to remain a priority with venture capitalists, however. If you are hoping to attract some investment capital to your firm, here are a few of those traits that VCs are hoping to find. Capable Networkers It is no secret that getting face-time with venture capitalists is much easier if you network your way to them rather than cold-calling or emailing. […]

For young and rising companies in search of business funding, there is no one-size-fits-all option. Venture capital and business loans are two of the most desirable choices, but they are not equally beneficial choices in every situation. There are significant differences between when each is a good fit for a growing firm. Venture Capital Seeking out venture capital is best for businesses that are young but also have the potential to become huge both geographically and financially. Venture capitalists […]