Who To Approach For Funding
" You may be seeking funds from a venture capitalist (VC) as an alternate to funds from a bank. Banks lend against collateral and are not geared towards financing projects where there is a possibility of high return, but limited security. "
"Venture capitalists are professional investors who provide funds in return for an equity stake in your company. They invest for a period typically ranging from three to seven years, after which they will exit from your company. They expect to get their profits from the capital appreciation in the investment. Because of the inherent high risk in their investments, only a small number of their investee companies may give them high returns. However, this would be sufficient to provide them overall returns on their funds. "
"VCs generally play an active role post-investment. They mentor and monitor investee companies, often providing contacts to customers. They may help in identifying possible alliance partners; they may help in identifying experienced persons who can join the company. They may try to steer the business in a certain direction. "
"Some corporates invest in start-ups or in existing businesses that have products complimenting or supplementing their business. They function like VCs and invest in the equity of companies. "
"In such investments, the brand name of the corporate investor will be behind your company. You may not have to worry about advertising and marketing; the corporate investor may take care of this. In fact, the corporate investor may be your key customer. "
"Angel investors are a source of informal funds. Some angels are individuals; others may have a corporate structure. Family and friends can be included in this category. An example would be a senior relative who has money to spare and a desire to help you. "
"There are different kinds of angels. Some have a social objective and want to help those whom they perceive as deserving entrepreneurs. Some have a purely financial objective, requiring financial returns. Some angels may have expertise in certain lines of business. Other may just want to invest in what they see as a good business opportunity. During the hey days of the dot-com boom, in the late 1990s many persons in India who did not have any idea of the IT industry, just wanted to invest in start-ups in this industry. They did not want to lose out on what they perceived as the next big opportunity for growth. "
Read more here.
"Venture capitalists are professional investors who provide funds in return for an equity stake in your company. They invest for a period typically ranging from three to seven years, after which they will exit from your company. They expect to get their profits from the capital appreciation in the investment. Because of the inherent high risk in their investments, only a small number of their investee companies may give them high returns. However, this would be sufficient to provide them overall returns on their funds. "
"VCs generally play an active role post-investment. They mentor and monitor investee companies, often providing contacts to customers. They may help in identifying possible alliance partners; they may help in identifying experienced persons who can join the company. They may try to steer the business in a certain direction. "
"Some corporates invest in start-ups or in existing businesses that have products complimenting or supplementing their business. They function like VCs and invest in the equity of companies. "
"In such investments, the brand name of the corporate investor will be behind your company. You may not have to worry about advertising and marketing; the corporate investor may take care of this. In fact, the corporate investor may be your key customer. "
"Angel investors are a source of informal funds. Some angels are individuals; others may have a corporate structure. Family and friends can be included in this category. An example would be a senior relative who has money to spare and a desire to help you. "
"There are different kinds of angels. Some have a social objective and want to help those whom they perceive as deserving entrepreneurs. Some have a purely financial objective, requiring financial returns. Some angels may have expertise in certain lines of business. Other may just want to invest in what they see as a good business opportunity. During the hey days of the dot-com boom, in the late 1990s many persons in India who did not have any idea of the IT industry, just wanted to invest in start-ups in this industry. They did not want to lose out on what they perceived as the next big opportunity for growth. "
Read more here.
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For more information, visit www.EvanCarmichael.com. |
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