The venture capitalist provides capital to a promising perspective to resell its stake by 5 to 7 years in making a capital gain income. Investors expect a return on investment from 5 to 10 times their bet. Unlike the banker, the investor does not seek collateral but looks closely at the business plan and the people who run the project.
Venture capitalists analyze projects meticulously before choosing those they are interested in. At the end, they choose to finance on average 5 to 10 out of a hundred projects.
We show you here a few of the elements that venture capitalist consider before choosing projects. These results come from a survey performed on 70 venture capitalists.
The product and the market are highly considered by venture capitalists. They seek to understand whether the market is ready for the product and whether it has tendencies for development.
The other factor is relative to the ability of the business to be strategic and competitive. Venture capitalists analyze the level of competition, their relation with their suppliers and distributors, and whether they can stop new business from starting.
Team leadership. It defines the leadership skills and experience of leadership and management team.
An attractive project has to be able to stay competitive, and manage their operations (sales, production, etc) in the most effective way.
Financial projections. It concerns such as the time to reach the threshold of profitability and the rate of return.
Funding. Criterion that defines the relationship between the timing and targets for funds. Venture capitalists must be careful in managing their portfolio and to the commitments made to investors about the type of investment they make.
All of these elements are important for a venture capitalist in order to choose what project to fund. Business can choose to get funding from different sources, banks, angel investors, or venture capitalists. The last two are most likely to give priority to these factors.
Although bankers may be more attracted by a business financial history, venture capitalists regard other factors highly. Managerial skills, the personality and the leadership of the entrepreneurs are for venture capitalists equally important.
Venture capitalists analyze projects meticulously before choosing those they are interested in. At the end, they choose to finance on average 5 to 10 out of a hundred projects.
We show you here a few of the elements that venture capitalist consider before choosing projects. These results come from a survey performed on 70 venture capitalists.
The product and the market are highly considered by venture capitalists. They seek to understand whether the market is ready for the product and whether it has tendencies for development.
The other factor is relative to the ability of the business to be strategic and competitive. Venture capitalists analyze the level of competition, their relation with their suppliers and distributors, and whether they can stop new business from starting.
Team leadership. It defines the leadership skills and experience of leadership and management team.
An attractive project has to be able to stay competitive, and manage their operations (sales, production, etc) in the most effective way.
Financial projections. It concerns such as the time to reach the threshold of profitability and the rate of return.
Funding. Criterion that defines the relationship between the timing and targets for funds. Venture capitalists must be careful in managing their portfolio and to the commitments made to investors about the type of investment they make.
All of these elements are important for a venture capitalist in order to choose what project to fund. Business can choose to get funding from different sources, banks, angel investors, or venture capitalists. The last two are most likely to give priority to these factors.
Although bankers may be more attracted by a business financial history, venture capitalists regard other factors highly. Managerial skills, the personality and the leadership of the entrepreneurs are for venture capitalists equally important.
About the Author:
Wade Henderson - recognized Professional - 15 yrs in the Business Finance Field - strong reputation for getting the deal done. IMMFinancial.com private venture capital venture capitalist Get a totally unique version of this article from our article submission service
