Venture Capital Magazine

fundingpost

This is some feedback from our first Arizona Venture Capital & Angel Investor conference on Dec 6, 2007.

peter d


I would rather not just own shares in a company or mutual fund because these options don’t appear to actually promote environmentally friendly companies. Is there some way to invest in venture capital firms that in turn invest in environmentally friendly companies?

OhashiMedia

Presentation from Göran Eriksson and John Garcia

Groshan Fabiola


Almost all entrepreneurs think of venture capitalists when they are planning to expand their business or start a new one. For the past few years, venture capitalists have been the main source of funding for thousands of business, technology, Internet and biotechnology companies.

However, there are some problems associated with VC funding. A major limitation of VC funding is that many venture capital firms are very industry specific. Rather than go solely by the merits of the business plan, some VC funding companies are guided by the nature of the company.

Another limitation of VC funding is that venture capitalists often demand to be on the board of directors of the company that they are funding. Often this disintegrates into the venture capitalist acting as the CEO. Some business owners complain that as soon as VC funding rolls into the company, the role of the founder shifts from critical company building functions to preparing reports, attending meeting and writing memos.

In addition some business owners say that as the first dollars of VC funding rolls into a company, venture capitalists begin to get meddlesome and start trying to call all the shots for running the business.

VC funding also brings with it tremendous pressure to create profits quickly. This could lead the founder to make some bad judgment calls or even launch products too early or into the wrong markets.

Some of the terms accompanying VC funding and the demands made by some of the venture capitalists can lead to eroding of team spirit and loss of commitment by employees to the products.

Most venture capitalists get their money from various institutional and pension fund investors. Like other investors, venture capitalists also go through a process of raising funds. They do this by raising funds from foundations, endowment funds and retirement funds. As venture capitalists are investing other people’s money they often tend to try and be in a position of control in the company. As a result most venture capitalist firms demand a seat on the board of directors and stock options as part of VC funding.

Despite the numerous disadvantages surrounding VC funding for many business owners it is the only source of funds. Venture capitalists often offer VC funding up to several billion dollars. For some entrepreneurs VC funding is the only option by which the entrepreneur can realize his or her dream.

For more resources about Invest capital or even about small business investment company and especially about business investor please review these links.

TomMcKaskill

My book, Finding the Money, explains why so few ventures attract external finance, but it also sets out a process which will help high growth potential ventures succeed in getting venture capital.

Len McDowall


This is a continuing series of articles on how to write a Business Plan or Information Memorandum to raise capital, Part 8 discusses the business plan content specifically ‘Management’.

Management

The product or service offered by a company may be excellent but it is people that make businesses successful. Venture capitalists back committed, experienced and well-balanced management teams with, hopefully, a good product or service. Not vice versa!

The emphasis is very much on management teams, not particular individuals. Investors shy away from ‘one man bands’ owing to limitations on the amount any one person can accomplish. They seek a well-balanced management team for two reasons:-

(i) The business will probably survive the loss of a key person and…

(ii) A complement of skills ensures that the important managerial functions -production, sales, and finance, among others – will be attended to.

Accordingly, this section of the business plan provides the key to the potential investor and will figure large in his investment decision.

From the investor perspective management teams can be categorized from the most to least preferable as follows:-

1. All members of the team identified and fully committed to the venture. This is the ideal situation as the team is on board and working together, especially when team members have experience and a successful track record. This is one of the prime reasons that investors are keen to back management buy-outs from parent groups.

2. All the team members are identified but not everyone is on board. This is a typical situation where the existing management recognizes the need for additional and complementary management skills but cannot bring that person on board until funding is in place. The possibility that they may not join is a source of concern for investors.

3. One or more of the team have yet to identified, i.e. gaps in the management team. In these circumstances it is important to recognize the need and indicate how the gap will be plugged. This may include part time staff or outside advisers until a suitable full time person is recruited. The recruitment aspect makes the team less desirable and investment more risky.

4. The ‘one man band’. This is usually an unacceptable situation for investors unless the person has an outstanding track record in developing successful businesses. It may then be possible to build a team around this person.

The best position is to assemble your team before seeking venture capital or at least identify its members. This will significantly reduce the perceived risks and increase the likelihood of successfully finding finance.

The other aspect regarding management which will be of paramount importance to investors is their commitment to the venture – not just in terms of “blood, sweat and tears” but also financial. Investors will expect management to invest personally in the opportunity as an explicit show of faith and commitment. If there is no such personal investment, venture capitalists, who are usually asked to put up most of the cash will be reluctant to do so. If the management is not willing to back the venture themselves why should an investor? The amount of that personal investment differs from case to case, but the sum should be significant in terms of personal wealth.

The main points for inclusion in this section of the business plan are to:-

• Provide a brief synopsis of each manager reviewing career highlights, duties and responsibilities and past accomplishments which demonstrate ability for the tasks required.

• Explain how the management team is to be organized and describe each member’s primary role. If the company is established and has an effective management structure an organization chart shown as an appendix should be included.

• Discuss the board of directors, outlining any non-executive members and their function.

• Provide details of salary packages and any personal investment in the company. Include a list of shareholders in the appendices.

• Identify any weaknesses in the team and how they will be overcome i.e. training, recruitment, outside advisers.

• Explain the strategy to retrain and motivate staff, ie. key executive share options, bonuses, profit sharing etc.

• Describe support provided by professional advisers both current and ongoing.

The content of Business Plans will be further covered in subsequent articles by Len McDowall.

© Len McDowall, Integral Capital Group 23rd October, 2007

www.integralcapital.com.au

choosy_yash


I needed a venture capital for the development of the “Online Real Estate Project” for advertisement and bringing property dealership in a corporate sector on a global level.

ideahaus

Episode 3: Meeting with your team to find start-p money.

rsins


Joint Venture membership sites are sites where people go and join, either for free or paid subscription, so they can find JV partners all from one location. Asking “how can I cost-effectively sell to more customers quickly” might lead you to some powerful joint-venture strategies.

With a joint venture, you only pay for results. So the best plan of action would be to restate your Joint Venture offer, indicating that you are prepared to be flexible and are open to alternative suggestions. The brains of some of the big players in this business, my weekend in Charlotte was also spent working out new joint venture concepts with many of the other marketers who, like me, had come to hear Mike, Gary, Craig, Joel, and Robert speak. He works with other respected people in the business to share knowledge and is probably really fed up with people emailing him to ask him for a joint venture. Joint Ventures Will Eat Your Profits Most small business owners would rather struggle to get clients, and get mediocre profits at best, instead of sharing the profits with a joint venture partner that sends clients their way.

Ideas on how to joint venture ideas are boundless. A joint venture is formed when you not only have an alliance but you come up with a strategy to find customers together. For more detail go to: www.joint-venture-secret.com. You can do this in several ways, but there are a few easy methods that you should combine: free publicity, viral marketing, joint venture deals and advertising on a large scale. #Through your business associates and suppliers Introductions from people in your network is a very effective way of meeting potential joint venture partners. The way it’s going to roll out is the joint venture is buying two rigs. The first thing the SALM would do is find companies with products or services that your customers would want to buy and then you negotiate a joint venture deal where you would give your endorsement to their products for a percentage of the profits. The last tip for immediate traffic is Joint Venture. In a nutshell a good JV or joint venture consists of the following. These are just some ways to finance international trade ventures; you can also look into the possibility of grants, venture capital and joint ventures with local companies.

The Joint Venture between the merchant and these marketers can be structured in many ways (in fact, each may be unique), but let’s just play out a typical scenario for the purpose of an example. For more help visit to: www.joint-venture-guide.com. The following are ten online joint venture ideas. Exchanging links with other relevant websites is a great way to start building partnerships with other website owners and may open the door for future joint venture requests. A company might establish an RO with the aim of exceeding its legal restrictions, and thereby establish the functional equivalent of a joint venture or wholly foreign owned enterprise while avoiding much of the expense and inconvenience. Hence some introspection needs to be done regarding the digital cameras and cell phones in their joint venture together in the technological world. For any joint venture project to be successful, the partners must possess certain skills that are required to choose the right deal, the right partners, and to promote the project successfully.

URL:-

http://www.joint-venture-softwares.com



http://www.easy-jv-manager.com

admogul


Looking for a standard format and example if possible for a 2 page business plan popular when seeking venture capital.