![]() Thus the primary return sought by the investor is essentially capital gain rather than steady interest income or dividend yield. They make higher capital gains through appreciation in the value of such investments when the new technology succeeds. It may be at any stage of the business/production cycle, that is, start-up, expansion or to improve a product or process which exist associated with both risk and reward. Related Posts Value Added Statements: Definition, Advantages, and Disadvantages! Investors join the entrepreneurs as co-partners and support the project with finance and business skills to exploit the market opportunities. Thus it is a long-term association with successive stages of the company’s development under high-risk investment conditions, with a distinctive type of financing appropriate to each stage of development. They are in the broader sense is not solely an injection of funds into a new firm it is also an input of skills needed to set up the firm, design its marketing strategy, organize and manage it. The relatively high risk of venture capital’s compensated by the possibility of high returns usually through substantial capital gains in the medium term. They have also existed described as “unsecured risk financing”. However, high technology need not be a prerequisite for them. The conventional financiers, unlike Venture capitals, mainly finance proven technologies and established markets. It exists said that Venture-capital involves investment in new or relatively untried technology, initiated by relatively new and professionally or technically qualified entrepreneurs with inadequate funds. Venture capital’s considered the financing of high and new technology-based enterprises. Venture capital stands also known as risk capital. The provider of venture capital also provides managerial and technical support. Here money is provided by investors to start a business that has a strong potentiality of high growth and profitability. This is a very important source of financing for a new business. Venture capital’s a type of private equity, a form of financing provide by firms or funds to small, early-stage, emerging firms that exist deemed to have high growth potential, or which have demonstrated high growth. To connote the risk and adventure of such a fund, the generic name Venture-Capital existed coined. ![]() “Capital” means resources to start an enterprise. The venture is a course of processing, the outcome of which is uncertain but to which attended the risk or danger of “loss”. ![]() #Know and understand the Dimensions of Venture Capital:Ĭapital invested in a project in which there is a substantial element of risk, typically a new or expanding business. ![]()
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