PowerPoint Presentation

Venture Capital Funding

Robert Smith

ContentsIntroductionFeatures of Venture CapitalAdvantages of Venture CapitalDisadvantages of Venture CapitalStages of FinancingVC Investment ProcessVenture Capital in the USAConclusion

IntroductionVenture capital is the financial capital provided by investors to early stage, high potential and startup companies.Venture capital firms get money by owing equity in the company.

Features of Venture CapitalHigh RiskLack of LiquidityLong Time HorizonProvided at Early StageHigh-techParticipation in ManagementEquity Participation

Advantages of Venture CapitalIt provides large sum of equity finance.It brings wealth and expertise to your company.VC funding is not a loan scheme, so there is no repay schedule.Easier to secure future funding through venture capital funding.

Disadvantages of Venture CapitalLengthy and Complex process. They need detailed business plan and financial projections.You have to add a member of VC firms in your companys management team. This can create internal problem in the company.At deal stage you have to pay for legal and accounting fees.

Stages of FinancingFinancial StagePeriods (Funds Locked in Years)Risk Perception ActivitySeeding Capital7-10ExtremeR&D for Product DevelopmentStart Up Capital5-9Very HighDeveloping PrototypesEarly Stage Capital 3-7HighStart Commercials Production and MarketingExpansion Capital3-5Sufficiently HighExpand market and working capital needLate Stage Capital1-3MediumMarket expansion and Acquisition

VC Investment ProcessDeal OriginationScreeningEvaluationDeal StructurePost Investment ActivityExit Plan

Venture Capital in the USAIt is hard to create VC firms.For two-third of VC firms, the first fund is their last fund.Only 10 % of VC firms launch more than four funds.Difficult for VC firms to become a two-tier.Venture capitalists invested some $29.1 billion in the U.S. through the fourth quarter of 2011.

ConclusionThe venture capital firm is an uncommon institution. It rises on reputation and skills of its person. VC firms can assist small companies to upgrade their technology.Continued success is needed to become top-tier firm.

Reference Linkshttp://www.mytopbusinessideas.com/advantages-venture-capital/http://en.wikipedia.org/wiki/Venture_capitalhttp://iveybusinessjournal.com/publication/venture-capital-firms-in-america-their-caste-system-and-other-secrets/http://bit.ly/18xGcx1

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