Venture Capital - What Are They Looking For?

Venture Capital – What Are They Looking For?

The venture capital market gets a lot of publicity. Despite this, it is also clear that a certain amount of mystery surrounds the industry. In this article, we look at a very simple question – what are venture capital funds looking for in prospective businesses?

The first thing a fund manager looks for is a potential home run. They are willing to invest a lot of money, but only if the potential return on investment is huge. If you aren’t thinking big, don’t bother seeking out this type of funding.

Along this line of thinking, the fund managers are also looking for a product in a growing market. You might have the greatest idea for movie DVD technology in the world, but you are probably going to get little or no VC interest. Why? The market is moving past DVDs to direct streaming solutions, to wit, your idea is antiquated and in a slowing market.

The third element is the ability to quickly recover the capital investment. What does this mean? It simply means the ability to take the company public or sell it in a reasonable time of say no longer than 5 years. Fund managers are in the game to make as much money as possible. Any talk of “growing” a company should only be taken in reference to their desire to get it to the payoff stage as soon as possible.

The fourth characteristic looked for is experienced management. Would you give a couple million dollars to someone who has never done something before? Maybe, but you would feel a lot better giving it to a company with management that has a history of having successfully brought companies to market. If you don’t have strong management, an easy solution is to consider hiring it. It could be …

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Forex Trading Strategies: Threat Capital

Forex Trading Strategies: Threat Capital

Threat Capital would be the amount of cash that a enterprise or particular person is willing to shed. This is a usually used term in trading and forex markets. These are allocated funds for high threat investments because the maximum quantity that a person would be willing to entirely drop. The clear incentive to “put up” threat capital for yet another individual or entity is monetary get.

Investment specialists and forex brokers advise to only use risk capital for investments that happen to be extremely speculative with a big potential payoff. High danger investments usually involve a potentially catastrophic profit, so a fantastic example of risk capital would be an investor who makes their funds accessible to a startup organization which has powerful development potential. The funding is invested into the business, together with the hopes that the new firm tends to make tremendous profits, realizing there is a threat that it will not.

A small-time instance of threat capital is displayed by means of acquiring a lottery ticket. Although the payoff is potentially substantial, the odds of my investment into the lottery succeeding are subsequent to zero. So the volume of capital that I am personally prepared to place forth into this speculative investment, and potentially lose, is $1. When the odds for winning the lottery higher, I’d likely invest more of my capital in wanting to win.

In some circumstances, Risk Capital is equivalent to Venture Capital (VC).

When a start-up business enterprise is in search of danger capital or venture capital, they may be in search of revenue from an investor to help grow or commence their business enterprise. When the business presents a powerful business strategy and displays wonderful possible for good results, an investor might be willing to lend it begin up cash.

Likewise, if …

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