Venture capital
Venture capital is a form of private equity capital which applies in particular to investment for expansion, or the backing of transactions such as MBOs and MBIs. It is an equity investment that gives the investor a âminority stakeâ; therefore the investor is dependent on the growth and profitability of the business to guarantee a return. Investors typically require at least 25% return on investment, because of the level of risk involved. Venture capital investments are usually in excess of £100,000 in size.
Venture capital providers not only provide capital to your business, but can offer their experience as well. Over 75% of companies utilising venture capitalists felt that they had received major contributions in terms of business development from their particular provider(s). Such contribution ranges from; knowledge and management skills; guidance on strategic issues; contacts; financial advice; market information and industry experience.
Is venture capital suitable for your business?
If you are considering whether venture capital is the most suitable fundraising option for your business, you need to ask a number of questions. If your answers to the following questions are âyesâ, then your business is likely to be suitable for venture capital.Â
- Does your business have growth potential?
- Is your business in an expansion stage or are you looking for capital to back an MBO or MBI transaction?
- Are you looking for equity finance?
- Is your business able to offer at least 25% return on investment?
- Are you willing to give up a minority stake of equity to a venture capitalist?
- Is the size of required investment in your business at least £100,000?
- Will your business benefit from the knowledge and experience of venture capitalist?
Venture capital firms vary greatly and tend to focus on particular sectors, deal sizes or regions. We have long-established relationships with a number of venture capital providers and can present a shortlist of those most suited your needs, also initiating contact with them on your behalf.
In choosing the most suitable venture capitalist for your business, it is vital to have a well developed business plan and financial forecast to support the process. We have the facilities and experience to create financial models with realistic assumptions.
It is very important to structure and plan any arrangements with venture capitalists very precisely and realistically. We have significant experience in this field and will advise you on the best structure and timing of the deal.
We have vast experience with venture capital investments and will be happy to assist you with your decision and work with you to expand your business into a more profitable and established market player.
How can we help?
We will guide you through the entire process of acquiring venture capital support, providing you with the following:
- advice on the proposed transaction, its structure, and suitability for venture capital;
- a time schedule of the transaction along with planning guidance;
- preparation of a business model;
- preparation of a proposal;
- assistance and preparation of the business plan and financial forecasts;
- an assessment of the funds required and advice on the use of these funds;
- a comprehensive list of venture capitalists to approach;
- assistance with the negotiation of terms;
- additional services â tax advisory, contact with law firms.
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