If you own a start-up and are looking for funding options, then why not opt for Venture capital? If your business is doing well and has the potential of creating more revenue, then you can easily get the funding.
Overview of Venture Capital
Now, before you jump the gun and contact companies for funding, you might want to understand what venture capital all is about. If you have no clue what you are ‘venturing’ into, you can easily get cheated. Venture capital is a private equity investment given to start-up companies that have the potential to grow and flourish in exchange for the company’s equity.
There are many venture financial companies such as Intrepid Finance & Venture headquartered in Fishers, Indiana that offer financing and venture capitals to technological, logistics, and transportation companies. You need not have to worry about paperwork hassles as this can be processed from your smartphones. All you need to do is explain your requirements and leave the rest to their team of experts to guide you through the process.
Now you might be wondering how venture capital works. Venture capital firms receive funds from wealthy investors who are ready to invest in start-up projects. These firms then use these funds to invest in your business, if they find that your business has high growth potential. Venture capital has different stages that can be used as funding depending on your business development.
There are 6 types of venture capitals such as:
- Seed funding – Funding to begin a start-up
- Start-up capital funding – This funding is availed after the seeding funding
- Emerging Stage funding – Funding is availed when your business is starting to show potential
- Expansion funding – Funding is available when your business is looking for additional funding to meet demands
- Late-stage funding – Funding availed to businesses showing good revenue but no profits
- Bridge funding – Funding is availed to support mergers, acquisitions, or IPOs for businesses that have already reached maturity
Why opt for Venture Capital Funding?
Opting for venture capital funding does have its advantages. Some of them are as follows:
- Good opportunity for your business to expand
- Involvement of experienced venture capitalists into your business decisions
- Opportunities to meet business alliances open windows for your business to grow through networking
- You need not have to pay back investors if your business fails to perform
- You have access to large amounts of capital
- There is no pledging of collaterals involved as in the case of loans
- Can help improve the brand image for your company as venture firms have good contacts with PR and media companies
As with the case of any type of funds, there are also some limitations. Some of these are:
- You might not have any control over the decision-making for your business
- There might be a conflict of interest between you and your investors
- If you are new to the start-up industry, you might take time to get the right investment for your business without contacts
Venture capital is a lengthy process as investors require a detailed plan of your business and if satisfactory, then only they might move forward with the funding process. You might want to weigh the pros and cons of venture capital before opting for one.