What is VC financing?
Funding
Venture Capital (VC) is money invested in companies without a proven record of success, usually beginning companies. Normally VC financing comes when a person with the idea of a product first invests most of his money in the idea. The second level of financing can be provided by what is called an "angel investor" that can help the person more to realize their idea or product. In order to achieve VC financing, the preliminary results of the product or concept must look as if they prove to be profitable.
Most novice companies receive VC financing by doing business proposals that show a firm chance that the investor is progressing to finance VC to achieve considerable profit. VC financing an individual or society usually expects or hopes to bring at least 20% return on its funds, even if this has not been in many incidences. VC financing was previously called risk capital financing with a good reason. Negativity of SDThe "risk" with capital has created a Gradznz name Ual to finance VC.
VC financing was at its highest point during the DotCom boom in Silicon Valley, California. The first companies realized huge profits in very short time periods and provided partners of the financing of VC huge and rapid revenues from their money. Many companies were then published, which is often how the VC investor earns his money.
When the company becomes the public, it sells its shares in the open market, usually with a high value. Part of the profit of these shares is one of the financing of VC or individual. Then he may decide to re -invest his profits back into the company through the purchase of shares, or can get out and find a new company to support.
Unfortunately, DotCom bust has tame the imagination of many who offer VC financing. Possibility to get quick revenues from sizeSieving investment, usually from about 500,000 to 5 million US Dollars, was simply not available. VC financing has a strong risk element. In the end, the company can be almost broken or in red and those who have advanced VC funding remain with their original investment, if they exist. If the company has less than the financing of VC to be introduced, it is referred to as "underwater".
It was theorized that many VC financing companies that have rapidly increased during the DotCom industry to finance start -ups would invest more carefully after the bust. Many of them do, but some successes in Internet companies have shown that VC funding can still be quite profitable. In particular, those who offered Google's financing earned a significant amount of money in their initial public offer (IPO) shares. Google shares have risen dramatically and smiled on the faces of VC financial companies that were involved in its early phases.
Financial analysts DOPOThey guarantee that novice companies try to look for part of the Investment of Through VC Financing and through Loan from Banks, if possible. Those with proven records in previous start -ups may have a little easier time to get loans from banks. VC financing companies, because DotCom busts, tend to be more cautious. It is useful to have a fixed business plan that shows a strong probability of profit. However, about 90% of business proposals for VC financing are rejected, although the probability of profitability is high.