Venture capital is funding invested into your businesses success.
Venture capital includes funds that are made available by a private group of investors into a business with high growth potential. A group of investors will invest money into a business with the goal of earning a profit on their investment. They will invest in all stages of a company if they find it worthy of an investment. Venture capital is best suited for companies with a new, unique product or service that has a large national or international market potential.
A venture capital firm also wants to make sure that the company has the potential to gain $25 million in gross revenue potential from their unique product or service before they will invest in that company. It is critical that you can make a minimum of a 50% profit margin with your product or service to help maximize your profit and growth potential.
Another factor that plays an important role in determining if your business will qualify for venture capital is whether or not your business has a strong management team with a proven track record of business success.
A venture capital company will typically invest between $500,000 to $5 million or more into a company. More money is invested in the later stages to assist with growth. Human capital is also invested in the company. This means that consultants are provided by the investment firm to work with your management team to ensure you have optimal growth from your investment.
Use our free capital search engine to find available venture capital for your business.
|Capital Type||Capital Type Definition|
|Equity Loan||Offer of an ownership position to induce the loan or can be a note that has an option to convert from debt to equity.|
|First Round Funding||Typically funding that accommodates growth. Company may have finished R&D. Funding is often in the form of a convertible bond.|
|Second Round Funding||Maturing company where a future leveraged buyout, merger or acquisition and/or initial public offering is a viable option.|
|Later Stage Funding||Mature company where funds are needed to support major expansion or new product development. Company is profitable or at a breakeven point.|
|Merger and Acquisition Funding||The combining of two companies. If one company survives, it is a merger. If both survive, it is an acquisition.|
|Mezzanine Funding||Your Company has made good progress which now makes positioning for an Initial Public Offering (IPO) viable. Venture funds are used to support the IPO.|
|Seed/Startup Funding||The earliest stage of business funding and given typically with no operating history. The investment is based on a solid business plan, the background & experience of your management as well as your target market and financial projections.|