Trouble Finding Venture Capital?
"Most venture capital groups don’t step in for the initial funding of a company (the first $1 million to $2 million). This gap is being filled by emerging angel groups."
"Even the mighty Amazon.com, which today is worth a mind-boggling $18.2 billion, was turned down initially by VCs."
"Founder and entrepreneur Jeff Bezos turned to angels for financing and was able to raise the first $1.2 million to get the company going. Later, Bezos and Amazon.com were able to get $8 million from VC groups, but this was only after he had achieved his first financing from angels."
"According to a 2003 article in the Journal of Private Equity titled “The U.S. Angel and Venture Capital Market: Recent Trends and Developments” by Jeffrey Sohl (director of the Center for Venture Research at the University of New Hampshire), there are 1,000 venture capital funds managing about $175 billion."
"These funds invest between $30 and $35 billion annually in entrepreneurial activity and bankroll less than 3,000 companies per year. Many of the financings are for companies already in their portfolios."
"A typical VC round of funding is for a later-stage deal where they are investing between $10 and $15 million, according to Sohl. This creates a real funding gap (particularly for early stage companies)."
"Sohl states: “The first market inefficiency is a capital gap between the needs of early stage ventures and the suppliers of early stage capital. High-growth ventures need patient, value-added equity capital to fuel growth.”"
"Sohl’s analysis is that angel investors provide close to 80 percent of the seed and start-up capital for high-tech ventures. In 2000, seed and start-up investments in the U.S. amounted to only $2.2 billion (all business sectors) in 382 deals. This represented 2.4 percent of total capital invested and 6.8 percent of total deals that year."
Read more here.
"Even the mighty Amazon.com, which today is worth a mind-boggling $18.2 billion, was turned down initially by VCs."
"Founder and entrepreneur Jeff Bezos turned to angels for financing and was able to raise the first $1.2 million to get the company going. Later, Bezos and Amazon.com were able to get $8 million from VC groups, but this was only after he had achieved his first financing from angels."
"According to a 2003 article in the Journal of Private Equity titled “The U.S. Angel and Venture Capital Market: Recent Trends and Developments” by Jeffrey Sohl (director of the Center for Venture Research at the University of New Hampshire), there are 1,000 venture capital funds managing about $175 billion."
"These funds invest between $30 and $35 billion annually in entrepreneurial activity and bankroll less than 3,000 companies per year. Many of the financings are for companies already in their portfolios."
"A typical VC round of funding is for a later-stage deal where they are investing between $10 and $15 million, according to Sohl. This creates a real funding gap (particularly for early stage companies)."
"Sohl states: “The first market inefficiency is a capital gap between the needs of early stage ventures and the suppliers of early stage capital. High-growth ventures need patient, value-added equity capital to fuel growth.”"
"Sohl’s analysis is that angel investors provide close to 80 percent of the seed and start-up capital for high-tech ventures. In 2000, seed and start-up investments in the U.S. amounted to only $2.2 billion (all business sectors) in 382 deals. This represented 2.4 percent of total capital invested and 6.8 percent of total deals that year."
Read more here.
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For more information, visit www.EvanCarmichael.com. |
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