BY
S.PRIYADHARSHINI
MAHRM
INTRODUCTION:-
Venture capitalists (VCs) represent the most glamourous and appealing form of financing to many entrepreneurs. Theyre known for okay senior high-growth companies in the early stages, and many of the best-known entrepreneurial advantage stories owe their growth to financing from venture capitalists.
VCs can bring home the bacon large sums of money, advice and prestige by their mere presence. Just the circumstance that youve obtained venture capital backing means your business has, in venture capitalists eyes, at least, considerable potential for rapid and bankable growth.
VCs make loans to--and equity investments in--young companies. The loans argon frequently expensive, carrying rates of up to 20 percentage.
Many venture capitalists seek very high rates; a 30 percent to 50 percent annual rate of return. Unlike banks and other lenders, venture capitalists a great deal take equity positions as well. That means you dont book to wear out hard-to-get cash in the form of engagement and header installments. Instead, you give a put of your or other owners interest in the company in exchange for the VCs backing.
The catch is that often you have to give up a large portion of your company to get the money. In fact, VC financiers so frequently seize majority control from and then oust the founding entrepreneurs that they are sometimes known as vulture capitalists. But VCs educe in all sizes and varieties, and theyre not all bad.
Venture capitalists typically invest in companies they anticipate being sold each to the public or to larger firms within the next some(prenominal) years. Companies they will consider investing in usually have the following features:
Rapid, steady sales growth
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