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Thursday 21 February 2019

Learning The Advantages And Disadvantages Of Venture Capital

By Donna Scott


What does it take to become successful in the field of business? Does it take a perceptive and strategic leader so that goals will surely be targeted by the team? Does it need creative and innovative minds to come up some unique idea that has never been used by others? Maybe. But despite of the characteristics and characteristics you got there, you still need one thing for all of it to make it work. And that is your funds. Where should you get it? Most would certainly raid some banks until they got indebted by it. But now, more individuals are finding some ways and use venture capital funding for their advantage.

It was never easy in the first place to start a business. Some may not have this kind of difficulty because they just succeeded their company by their parents. Others have to climb from the bottom to the top just to be successful. But most beginners will surely want to try the basic thing. Just imagine it like how RPG games run. Players should really grind their avatar or character to level up and become stronger. And there are ways to grind up as well even in the context of corporate field.

Expanding your company will definitely need more investment. Furthermore, many businessmen would really aim to become one of the best on that field. They would certainly work hard, construct some strategies and ideas together with their workers. However, when ideas needs to be funded, and they are still lacking with that, then that may cause them a problem.

For those who just started their own company, most of them would really rely on venture capital. Those capitalists will finance the business for an exchange of equity on the firm. In addition, here are also the boons and banes about it.

This can be a great advantage for those beginners. You got a new idea into your mind and want to sell it on the market. And to develop that into a product, you really need some finance. And this is how the venture capitalists help you.

Since you are lacking with that resource, you would need venture capitalists to provide you the funds. They will basically help you to expand your business since they also will gain benefit from it. It is a win-win situation for the both of you. Furthermore, you do not need to pay the funds that they offered.

However, since they gain equity, it just means one thing. They own your company as well. They will be the new owners of the business, therefore, they also have the right to give demands and suggestions on your work.

Others might find this kind of difficult for them to handle especially when there is a conflict between them and the investors. Who knows, they might withdraw their investment or perhaps pressure you to make your products more effective. Your ownership is now diminished due to the equity and you might not fully control now your own company.

This might be an advantage or disadvantage on you. But if your product is totally worth it, then this might turn into your advantage. That is if ownership is not an issue to you.




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