Thursday, May 27, 2010

Understanding Venture Capital

I have come across this term before when i watched Biz talk on Bernama Astro.

There is this company called Malaysia Venture Capital Management Berhad (MAVCAP)

http://www.mavcap.com/

Well, i tried to google what does it means by this term. Let's have an understanding on venture capital.=)

Venture capital equity means investing financial and human capital in partnership with you.

Venture capital equity is the business of investing capital, either financial or human, in partnership with your business's management team. Investments are made into new start-up businesses, or for expansion of an existing business. The investors prefer investing into a more established business with a history of profitability, but they are open to all businesses that have good potential.

Before a venture capital firm will consider your business for an investment they will look to see that your business has a new and unique product or service which is in high demand. If you feel that the market potential for your product would allow your business to reach $50-$100 million or more in value over the next 5 – 10 years, than you are in a good market as far as venture capitalists are concerned. The goal with venture capital equity is to earn a high profit, so the VC firms have high standards for companies they invest in.

They also want to ensure, before investing, that your business has a strong management team with entrepreneurial enthusiasm with a vision for strong growth. Proven business success among your management is a plus.

Venture capital is often invested into stages with a company. Generally $1-2 million is invested for start up, and then $7 million or more is provided throughout the life of your business for proper and accelerated growth and expansion.

Our free business capital search engine provides you with a list of venture capital firms that are waiting to fund your business venture. The capital search engine also contains thousands of other investment options for your business, unrelated to venture capital.

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