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Venture Capital Knowing Your Funding Options
Entrepreneurs and business experts have defined venture capital as a financing style between a capitalist and entrepreneur with a common goal of a handsome return in a short period of time, maybe 3 to 5 years. But while there are several resources on the definition and characteristics of this topic, few have actually discussed the options that this kind of business set-up has.
Before taking the plunge, know what these options are and how they can be applied to your current business plan.
The funding option depends on the stage of the company’s progress. Investment firms can invest from $ 50,000 up to $ 20 Million. If the company is still at its earliest stage, where a concept or invention is still to be developed or proved, the option is called seed financing. Here investment is spent on marketing and product development. Product ingenuity and market research are the areas being focused.
When the company has already developed its product and marketing strategy but needs money for the actual production and initial marketing, the funding option is called start-up financing. This is the common option for new entrepreneurs and inventors. Here funds are spent for the production and initial marketing. Amounts can range from $ 50,000 to $ 1 Million.
Sometimes a company already has its products and may have initially introduced them to the market, but receives little or no revenue at all. In this case, the entrepreneur may need financial assistance at this stage, called the first or early stage. The amount usually ranges from $ 500,000 up to $ 15 Million, depending on the extent of the changes that need to be made. It could be that the product needs to be revised or developed to make it more saleable, or it can be a mere repackaging or change in advertising strategy.
The next option is called the second or later stage. Here the company has its products and may have received revenues, and has the potential of making it big in the near future, but for some reason has no funds at hand. It could be that there are some loans that need to be paid, or other financial schemes that need to be complied with. That is why venture capital firms invest from $ 2-15 Million to help the company.
Some profitable companies want to expand, but does not want to put in more capital out of their own money. Their goal is not to keep the company for many years but for it to quickly grow in order to make an IPO within a few months, say 3-18 months. This option is called the third or mezzanine stage. Amounts range from $ 2 Million to $ 20 Million.
Similarly, this next option needs an investment before an IPO, but the time frame is within 3-12 months. This is called the bridge. Investment is also between $ 2 Million to $ 20 Million.
Remember that there is a specific option for each stage that your company has. The key is to know what options to use. Similarly, you must know where to find these venture capital firms. You must also develop a concise but comprehensive business proposal to present to them. Lastly, keep in mind that venture capital is not the end-all but just the beginning of more challenging things to come.
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Capital Medical Venture Whom To Approach For Funding
Capital medical venture or angel investor? Most entrepreneurs are confounded with this all-important question today. Who will invest money in their business or, more importantly which sort of investment should they approach? What would suit their business better?
Capital Medical Venture
A really good way of gauging this is by gauging your business venture. If you are confident of the ability of your business venture to provide good returns really soon, then go for venture capital firms. If you want to start large, then this is for you. These firms invest a whole lot of money, yes Im talking big money here their starting investment is five hundred thousand dollars and it goes into millions! But, they also charge a really high rate of interest more than twenty percent per annum. Plus you need to give them quick returns, which generally is not a problem in the medicine field.
A capital medical venture is a venture which is quite challenging to finance because it is a type of venture which requires an extensive expertise of the industry and a very, very methodical form of planning. The good news is nowadays, venture capital firms are actively on the lookout for companies like manufacturers of diagnostics, radiation systems of the intracoronary kind and surgical instruments which are minimally invasive. So if you are starting out on a business in the medical field, a capital medical venture, then this is the best time to start.
There are groups of venture capitalists who are very generous indeed and are willing to provide an entrepreneur with two hundred million dollars on (hold your breath!) a single transaction. What is more they are willing to consider many different kinds of investment structures such as management buyouts, recapitalizations which are leveraged, minority equity positions as well. So they are willing to be flexible.
Whom To Choose?
Coming back to the main point. What are the differences between an angel investor and a venture capital firm?
An angel investor generally has his own pricate money which he is willing to invest in a business. But a venture capitalist gets their money from a collection or rather, a group of wealthy individuals. Thus there is a big difference in the motivations of these two kinds of investors and the reasons behind why they invest.
A venture capital firms main motivation is to get good returns. Moreover, competition for their limited kind of funding is extremely keen. Many firms fund only about five companies out of say, every thousand business proposals they view per year so they are extremely cautious.
Angel investors have, on the other hand, experience in building a company. Sometimes, it gives them a high to invest in new startups and that is their sole reason for investment. Sometimes an idea catches their fancy and they invest for the heck of it.
A capital medical venture is often a risky business, so opting for an gel investor in this case is the best course of action for a new entrepreneur.
Are you planning to startup your Capital Medical Venture? Visit http://www.ventureworthy.com/capital_medical_venture.asp to get the latest tips, and helpful resources.
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Hypo Venture Capital Asset Allocation: A Sound Investment Strategy Part 2
Here at Hypo Venture Capital we are committed to offering our clients access to the latest and broadest range of financial services and products on the market. We know that choosing the right strategy, the right investment and the right product is no easy task in this day and age! Whether its advice, investments or financial planning we are here to answer all your questions and facilitate all your financial needs.
In today’s complex financial markets, you have an impressive array of investment vehicles from which to select. Each investment also carries some risks, making it important to choose wisely if you are selecting just one.
The good news is that there’s no rule that says you must stick with only one type of investment. In fact, you can potentially lower your investment risk and increase your chances of meeting your investment goals by practicing “asset allocation.”
Asset Allocation Can Work
For instance, at age 25 you may decide to invest with the goal of retiring in comfort within 40 years. Most likely, your investment goal is to achieve as much growth as possible — growth that will outpace inflation substantially. In aiming to reach this goal, you may allocate 70% of your assets into aggressive growth stocks, 20% into bonds, and 10% into money market instruments. You have years to ride out the wide fluctuations that come with stocks, but at the same time, you potentially lower your risk with your bond and money market holdings.
Because your goals and circumstances are unique, you may want to talk with an investment advisor who can help you tailor an allocation strategy for your needs. Generally, your asset allocation will change as you reach different stages in your life, as your investment goals also change along with these shifts in lifestyle.
If you have been investing aggressively for retirement for more than 20 years and are now less than 10 years from retiring, protecting what your investment may have earned from market ups and downs may become more important. In this case you may want to gradually shift some of your stock allocation into your bond and money market holdings. Keep in mind, however, that many financial experts recommend that stocks be considered for every portfolio to maintain growth potential.
A Simple Process, Some Dramatic Potential Results
Asset allocation is a simple concept, yet vital to long-term investment success. In fact, a landmark study cited in Financial Analysts Journal shows that about 90% of the variability of average total returns earned by balanced mutual funds and pension plans over time was the result of asset allocation policy.3 For many individual investors, the asset allocation decision amounts to choosing what types of mutual funds to invest in and the amount to invest in each type of fund. Others may want to add individual securities to this mix after exploring their investment options.
Regardless of the asset allocation strategy you choose and the investments you select, keep in mind that a well-crafted plan of action over the long term can help you weather all sorts of changing market conditions as you aim to meet your investment goal(s).
Points to Remember
1. Asset allocation is the way in which you spread your investment portfolio among different asset classes, such as stocks and stock mutual funds, bonds, and bond mutual funds.
2. When prices of different types of assets do not move in tandem, combining these investments in a portfolio can help reduce the variability of returns, commonly referred to as “market risk.”
3. Mutual funds are pools of securities, usually offering diversification within a single asset class. Some mutual funds may include several asset classes.
4. The asset allocation that is right for you depends on your investment time frame, goals, and tolerance for risk.
5. As your investment time frame and goals change, so might your asset allocation. Many financial experts suggest reevaluating your asset allocation periodically or whenever you experience a milestone event in your life such as marriage, the birth of a child, or retirement.
Want to know more?
Hypo Venture Capital is an independent investment advisory firm which focuses on global equities and options markets. Our analytical tools, screening techniques, rigorous research methods and committed staff provide solid information to help our clients make the best possible investment decisions. All views, comments, statements and opinions are of the authors. For more information go to www.hypovc.com
Hypo Venture Capital is an independent investment advisory firm which focuses on global equities and options markets. Our analytical tools, screening techniques, rigorous research methods and committed staff provide solid information to help our clients make the best possible investment decisions. All views, comments, statements and opinions are of the authors. For more information go to www.hypovc.com
Venture Capital Intevestments For Consumer Brands Development
Venture capital will be ordinarily offered from the venture capitalists and also the professionals who invest money inside young, speedily developing companies that have the possibilities to be able to come to be considerable economic contributors. Its best option intended for businesses along with great up-front capital prerequisites which often cannot be financed by simply cheaper alternatives such as debt. These types of venture capital firms are actually the private close ties that are funded by simply private along with public cash, endowment cash, foundations, corporations, well-to-do persons and also foreign investors. These types of venture funds may usually use up these types of assignments -financing new along with speedily developing companies, aiding the development connected with new products and also services, purchase equity securities, increase value to the company via lively involvement and also have better risks while using expectation connected with better returns. Although taking into consideration company intended for capital investment, these types of venture capitalists properly screen the practical along with business merits from the proposed company which is presented comprising business plan to be able to these people.
The forms of venture cash usually offered from the venture capitalists and so are currently considering are generally consumer product venture funds such as health care venture cash, education venture funds, residence along with personal care venture funds, retail venture cash along with venture cash intended for business such as computers, software, networking along with FMCG venture fund. Whatsoever will be the industry, business will be relevant along with, brand is essential since it helps to produce the consumer be connected essential to build long-term, developing businesses. A number entrepreneurs do not have sufficient cash to be able to finance projects by themselves, and they must as a result look for in the garden university. Intended for Branding Advertising claims to be an crucial issue and then for this place must invest massive amount money. There are a few Indian venture cash that will offer venture capital intended for brand promotion along with advertising media inputs intended for business growth. The firms such as Times group private treaties significant other while using investee companies compliment these people inside making consumer brand value along with inside return the investee gives shares and also an integral part of business control to the investors.
Morpheus India is an Indian venture fund that provides venture funds for Indian consumer brands, Morpheus investing in mid-sized company as FMCG venture funds such as education venture fund and healthcare venture fund, Morpheus capital venture fund for specialty retail sectors.
This week we have Howard Morgan, managing partner, First Round Capital. For more information, show notes, and an upcoming schedule, go to www.thisweekin.com.
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Dev Ittycheria Joins OpenView Venture Partners
Boston, MA (PRWEB) November 13, 2013
OpenView Venture Partners, an expansion-stage venture capital firm focused on providing technology companies with deep operational support, today welcomes enterprise software expert Dev Ittycheria as the firm’s third Managing Director. Ittycheria joins the firm after a successful track record of building and scaling world-class software companies as a founder, CEO, senior executive, investor, and board member. He will concentrate on helping identify and invest in the best expansion-stage technology companies.
“We are thrilled to welcome Dev to the OpenView team,” said Scott Maxwell, OpenView’s Founder and Senior Managing Director. “His strong background in entrepreneurship, combined with his deep operational experience and his knowledge of cloud, SaaS, and enabling IT infrastructure, will make Dev a very valuable addition to the firm.”
Prior to joining OpenView, Ittycheria was a venture partner at Greylock Partners, where he spent time learning the venture business at the leading early stage venture capital firm in Silicon Valley. Earlier, Ittycheria was the president of BMC Software, where he and his team radically transformed a maturing business to outperform the competition on all meaningful financial metrics. Before that, as the co-founder, president, and CEO, Ittycheria built BladeLogic, a next-generation systems management company, into one of the fastest-growing enterprise software companies of the last decade. The company went public in 2007 and was acquired by BMC in 2008. Ittycheria was also previously a co-founder and CEO of one of the first venture-backed cloud computing companies.
In addition to identifying new investments at OpenView, Ittycheria will also leverage his operational and leadership skills to help the firm scale for the next level of growth.
“I’m very excited to join OpenView,” said Ittycheria. “It’s a dynamic firm that has done a terrific job of differentiating itself in the industry because of its sharp focus on expansion-stage technology companies and unique team of full-time, value-add consultants. I believe OpenView is extremely well positioned to dominate an important investment category over the coming years.”
Ittycheria’s arrival continues the ongoing expansion of OpenView’s investment team. In August, the firm also welcomed Mackey Craven as an Associate from Bessemer Venture Partners, followed by Blake Bartlett, who joined as a Vice President from Battery Venture Partners in November. The team’s growth underscores the firm’s strong belief in the future of enterprise SaaS businesses.
Founded in 2006, OpenView raised its third fund in March 2012 and has since invested in five new SaaS companies. This week, the firm also launched a completely redesigned version of its website, available at http://www.openviewpartners.com.
About OpenView Venture Partners
OpenView Venture Partners is an expansion-stage venture capital fund based in Boston that is focused on high-growth software, Internet, and technology-enabled companies. Through its staff of seasoned operating executives, who collectively bring several decades of technology and management experience to the firm, OpenView is able to help portfolio companies quickly optimize their product, go-to-market, and organizational and operational functions. Founded in 2006, the firm invests globally and has approximately $ 445 million in total capital under management.