Five Advantages Of Venture Capital

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Five Advantages of Venture Capital funding 1. Repayment A venture capital not being a loan scheme has no repay schedule hence one does not have to repay debt as a cost of doing business 2. Expert knowledge Many VCs have consultants and professionals on their staff that have deep knowledge of specific markets. These experts can help your business avoid many of the pitfalls that are usually associated with start-ups. 3. Offers HR consultants They are obligated to make profit from their investment in the business. The VCs often provide HR consultants who hire the best staff for their business. This can help in avoiding hiring the wrong people. 4. Easy to locate VC firms are very easy to locate because they are documented in business directories.…show more content…
Long and complicated procedure The venture capital investment process is complicated and the potential companies are vetted thoroughly before they are committed to it . Just because your company is backed by a venture capital doesn’t guarantee any success. However this shouldn’t discourage the founders who are seeking capital but should ground their expectations in reality . 2. There is a timeframe for ROI Venture capital firms are ten-year vehicles for investors . they are structured as 10 year commitments for the limited partners who invest in the fund . It has been quoted by Rosenbloom that "As a venture capital firm, we are not in the business of funding inventors or inventions, we are in the business of funding fast-growing companies,". The first three years are the initial investment years for the company and then it has only seven years to "make it." Venture capitalists like Rosenbloom considers seven years the average age for ROI . 3. Leads to overfunding – By raising too much money entrepreneurs to decisions which might end them up in bad terms . They should start by understanding how much money is needed thus raising only that much to reduce risks and over…show more content…
Flipkart announced that it had raised $700 million from investors includes Baillie Gifford, Greenoaks Capital, Steadview Capital, T. Rowe Price Associates and Qatar Investment Authority on the company's board, valuing the Bangalore-based internet firm at $11 billion. The investment has turned the Bansals into two of India’s wealthiest people. With their equity in the company totaling more than $940 million each, the pair are close to becoming billionaires, a remarkable sign of the investor confidence in India’s online retailing potential and an affirmation of Flipkart’s dominance in the region. Later flipkart also raised funding from venture capital funds like Accel India (US$1 million in 2009) and Tiger Global (US$10 million in 2010 and US$20 million in June 2011). In August, Flipkart announced the completion of its 4th round of funding from MIH (part of Naspers Group) and ICONIQ Capital. The company announced that it has raised an additional $200 million from existing investors including Tiger Global, Naspers, Accel Partners and Iconiq

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