Venture capital firms provide capital to unproven young businesses in exchange for equity or partial ownership of the firm. Generally, they are looking for high-growth businesses. With loan repayments and interest charges, they do reduce the primary owner’s share of the profits.
For more information on this topic, see the links listed below of articles posted on related Web sites.
- How To Be an Angel Investor – HBS Working Knowledge -- Tools and advice to potential angels, and resource manual for early state investors.
- Angel Investors – Small Business Notes -- Angel investors are individuals who invest in businesses looking for a higher return than they would see from more traditional investments.
- Finding an Angel – Small Business Notes -- Angel investors can be very difficult to identify and contact. They do not want to be deluged with business plans.
- Private Investors/Business Angels – CCH Business Owner’s Toolkit -- Angels can be a very good source of money if you are looking for outside investors but you are not interested in, or not a likely target for, a venture capital firm.
- Angel Investing - HBS Working Knowledge -- Business angels are among the most important, and least understood, players of entrepreneurship today.
- Angel Investors – Entrepreneur.com -- A series of articles on angel investors.
- Angel Investors – Entrepreneur.com -- These individual VC investors seem like they're from heaven, but be prepared to give up a chunk of your company for funding.
- Angel Search – VFinance, Inc. -- Over 23,000 potential angels.
- Guardian Angels - Electronic Matching Services – Entrepreneur.com -- Find the angel investor of your dreams through online matching services.
- How to Attract Venture Capital – Small Business Notes -- A firm may look at anywhere from 1,000 to 5,000 business plans per year. Out of that, approximately 2 percent will even get an interview.
- Marking the Perfect Pitch to VCs – HBS Working Knowledge -- When you are pitching your proposal to venture capitalists, tell them an emotional story.
- The Right Connections – HBS Working Knowledge -- In attracting funding for a new venture, professional ties and company connections are even more important than a good product in inspiring the trust and loosening the wallets of potential investors.
- The Power of Partnership – HBS Working Knowledge -- What does it take to make things work between an entrepreneur and a venture capitalist?
- Obtaining Venture Capital – Small Business Notes -- Venture capital firms will judge you by how prepared you are.
- Venture Capital – Small Business Notes -- Venture capital is a form of financing for a company in which you give up some level of ownership and control of the business in exchange for capital for a limited timeframe, usually 3 to 5 years.
- Venture Capital – CCH Business Owner’s Toolkit -- Money and expertise for hot businesses.
- Done Deals - HBS Working Knowledge -- What is it really like inside the turbulent world of venture capital?
- Locating Venture Returns - HBS Working Knowledge -- Syndications, pressure from limited partners and due diligence to the extreme all point to new times for the venture capital industry. What's next?
- The VC Quandry: Too Much Money - HBS Working Knowledge -- Venture capital money "overhang" continues as investors compete to get into a small number of deals each year.
- Why Baseball's Billy Beane is a Model VC - HBS Working Knowledge -- The general manager of baseball's Oakland A's is a master at achieving the most with limited resources.
- Venture Capital – Lawyers.com -- The term venture capital usually refers to funds that are raised and pooled together for the specific purpose of investing in start-up or early-stage business enterprises.
- What do Venture Capitals Look For? – AllBusiness.com -- How do I get venture capitalists to look at my business?
- Pratt’s Guide to Venture Capital Sources – This guide provides information on more than 1,200 sources of institutional venture capital.
- VC Secrets: Stages of Venture Capital - VentureXpert Web (membership required).
- Venture Economics - Thomson -- A source for global private equity intelligence.
- Institutional Venture Capital - Entrepreneur.com -- Venture capital funding isn't always easy to obtain, and you'll have to give up equity, but when you're a high-growth company with high-financing needs, it can be your best bet.