jeudi 14 février 2019

The Advantages And Disadvantages Of Venture Capital

By Donna Scott


In the world of business, one must be keen and strategic in order to make their company successful. It usually takes huge gambles and efforts to expand it. Furthermore, it also needs good strategies, planning as well as enough financing. But no matter how unique and great your ideas are coming from your strategizing, you still need some resources to work on it. And it usually risks your budget to make it work that is why most would run to banks to have a capital. But in this era, there are many ways to gain some funds and one of that is through venture capital funding.

Starting up a business is really a difficult thing to do but if your heart is set on it, then you can grind and work on it to the fullest. Likewise, most starters would surely want to get more experience as they work on this career. This is just the same as mothers who are raising kids. Once they have a new-born kid, they cannot skip the child rearing part and make their kid magically grew into an adolescent. Where is the fun and lesson if they manage to skip it?

To make their company expand, entrepreneurs and businessmen will surely find ways to do it. After all, they need to achieve the goals they have set with their team. And to attain that, they really need some finance for their foundation.

As you see, money is certainly important. It acts like a foundation and starting point for those beginners. Because not all can have it at once, many would select the alternative which is the venture capital. This method is simply understood as the investor provides money and shares your ownership. In fact, it has its pros and cons as well.

One of its advantages is how it certainly provides you some funds for your ideas. You just created your idea and want that to be the product to sell on the markets. To achieve that goal, you need some funds to develop it.

In that case, this method is surely applicable for that. Capitalists will allow you to expand and make that business as well as gaining a recognition on your brand before you lose to your competitors. This is not a loan and with that, they are considered to be an equity instead of thinking it as a debt.

On the other hand, because it stands as an equity, you will not have to repay their funds. And it just mean that they will share a slice of your ownership. As a result, you are not now the main boss of the company because they will take part on making decisions as well. It basically diminished your ownership.

For others, this might be a difficult trade especially when there are disagreements between the owner and investors. After all, they are now considered as the new owners now that you deal with them. There might be loss of control due to their demands.

There might be banes and boons about this. Businessmen should really think some proper ways to be more efficient. But for beginners out there, this might probably help them.




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