About Venture Capital
Venture Capital is a form of fund raising where equity (shares) in a company is exchanged for a sum of money.
How does government sponsored venture capital work?
The government assists with venture capital by sourcing venture capitalists - groups or individuals who make investments into companies in exchange for a share of the business. Venture capital or risk capital is a common source of funding for small or growth stage businesses that have little or no money of their own to risk. Venture capitalists invest in these businesses with the prospect of a large return if the company takes off.
Does the government make investments?
The government does not make direct investments itself but sources venture capitalists or investment companies, essentially making a “fund of funds”. These venture capitalists will have the expertise for investment decisions.
What are the advantages of venture capital?
There are a number of benefits of venture capital for a business. Venture capitalists may have the ability to invest large sums of money which can help your business to develop and achieve fast growth. Investors also have a wealth of experience to help you in achieving the most out the investment.
Are there any downsides?
Venture capital may come with some conditions or involvement from the investors, for example venture capitalists will want to ensure they make money on their investment so may push for decisions that make quick returns.
What can venture capital pay for?
Venture capital is used as an investment in the growth or development of the company. Investors will want to make sure they make a return on their investment so may specify or have involvement on what the money is used for.
How do investors get their return on money invested?
Venture capitalists obtain shares in your business in exchange for their investment. The premise behind this exchange is that an investment will allow your company to prosper and share value will therefore increase thus making the venture capitalists money.
How do I find out if my business is eligible?
Businesses will need to meet certain criteria in order to receive venture capital. Eligibility incorporates a number of factors that venture capitalists look at before making investments:
Investment companies will often specialise in investing in certain business sectors such as manufacturing, or information technology, therefore the sector your business operates in may determine your eligibility.
Location may also play a part, according to where the venture capitalists are based and where they make their investments.
Finally the size of the company, the stage of its development and the associated risk of failure will all go into a decision on whether to provide your business with venture capital.
Open 4 Business will advise you of the opportunities available so you can cut out the hassle of searching for the appropriate investors.
How do I apply?
Businesses need to contact the investment company. Open 4 Business will provide you with contact details so you can get in make contact with them and find out exactly what they are looking for.