Crowdfunding-Venture Capital Funding

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Venture Capital Funding

The Ultimate Fundraising Campaign Companion
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Is Startup Venture Capital For Your Business?
Venture Capital firms are financial firms that offer startup capital to new
businesses. Startup venture capital can be difficult for some entrepreneurs to
obtain since firms would be analyzing business plans thoroughly and making
sure that the funding applicants would be able to return the investments.
However, not every starting business nor every entrepreneur is suitable for a
startup capital from venture capital firms. Some entrepreneurs could not handle
the idea of giving up equity for venture capital firms. Equity capital would mean
that to return the investment, the business is allowing the venture capital firm to
have seats in the board of directors. This would mean that the venture capital
firm would have power and control over some aspects of the product service.
This may be a problem for some entrepreneurs.
This is an important thing that entrepreneurs should be able aware of, even if you
own the business, getting a venture capital startup fund would mean that you
should also shed some of your rights over the business. Venture capital firms
may even take a hand over the simple details like management like day-to-day
management and other aspects of the business. So, if you are an entrepreneur
who would appreciate this kind of system, then venture capital may indeed be for
you.
If your business is in the field where competition is fierce and the need to develop
a product and service in a short time is important, like technology and computer
software, then you could apply for venture startup capital from firms. Because
competition is tough in your field, time is the key. If you would not be quick
enough to sell your idea, then it is possible for somebody else to come up with
something the same.
In this situation, it would be important to get the funds quickly to set up the
operation in less time possible, too. Starting small and working to get bigger and
bigger is a business strategy that would take too much time and would waste the
perfect opportunity to develop and sell the business idea.
There are also experts saying that venture capital firms would only be suitable for
you if your business would be able to earn at least $50 to $100 million within a
time period of 5 to 7 years. Venture capital firms are looking at businesses that
make or whose goal is to achieve huge amounts of profits. If they see that the
business you are proposing would give them a chance to earn the millions that
they want, then it is possible that these firms would back or finance your
endeavor. Again, venture capital firms would not invest on businesses that have
small customer base, a low cost product and small sale and distribution scope.
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A venture capital firm would often work with different kinds of market. For
example, it is difficult for a venture capital firm to invest on lifestyle, retail, mining
or banking businesses. They also tend to avoid those products or services,
which are complicated and difficult for an ordinary person to understand, like a
modern technology which proves to be difficult to understand or learn.
If your business has the mentioned limitations or operate as mentioned above,

then getting startup capital for your venture would not be a good idea. There is
less possibility that venture capital firms would be approving your application.
It would be better to apply for business bank loans, personal loans or any other
options to finance your startup capital needs.
Venture On How Startup Capital Works
When a business is starting, unless you are among those endowed with financial
riches, then startup capital would not be a problem for you. There are banks or
angel investors that would invest on your business. Ever wondered how banks
and venture capital firms benefit from startup capital and how it exactly works?
Let’s try to answer that.
When starting a business, an entrepreneur is faced with different issues. There

is need for business space, furniture and equipment, supplies, and other things
necessary for starting a business. Aside from the equipments and material things
that an entrepreneur would need, there is also a need to hire people and pay
them.
There are different kinds of capital investments and startup capital is just one of
them. They are the seed capital, startup capital, mezzanine capital and bridge
capital. Seed capital is used for research and planning, startup capital for the
procurement of necessary materials needed for the start of the operation,
mezzanine would be for expansion of the business and finally, bridge capital to
resolve financing problems when starting the next level of financing.
If you would enumerate all the things where your startup capital would go, then it
would cover basic expenses for the entire first year. The money would normally
go to employees’ paycheck, logistics or utilities, rent for the business space,
maintenance, insurance, marketing and promotion, and finally taxes.
Startup capital has two types, the debt and the equity capital. The debt capital
refers to a loan which is required to be paid over a specific period of time with
interest and other fees. Normally, this is what you acquire from bank loans.
Equity capital on the other hand, would be about funding a business and in turn
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allow the funding organization to earn part of the business which is how venture
capital firms operate.
Most entrepreneurs make a mistake when they borrow funds that would suit their
needs during the best conditions of their business. Unfortunately, entrepreneurs
fail to foresee the worse scenarios and prepare for them. This is why there are
some business ventures that close down because of lack of funds. So, when
applying for startup capital or funding, it is important to foresee these situations to
be prepared for it.
Startup capital can come from venture capitals (VC) firms. There are also angel
investors which are different from VC firms because they do not operate as a
firm. Angel investors can give bigger funds but the transactions are more private
and more informal compared with firms. These firms would help businesses get
the startup money that they need, but it would entail hard work and patience.
VCs would normally offer nothing less than $250,000.
How would angel investors and VC firms earn from this system? The business
which received the startup capital would give the VC firm or the angel investor
stocks giving them ability to control the direction of the company. In this case,
VCs do not only get back their earnings, they get more than their money’s worth.
The business may buy the stocks owned by the VCs. Sometimes it would about
three to seven years before businesses would be able buy the VC stocks. On
the other hand, going for this kind of startup capital option also has some
downside. If ever you would like to sell your business, there are tendencies
when the VCs would block the sale. Especially if they are not going to get about
10 to 30 times their investment.
Startup capital from different organizations could totally help us boost our
business venture. Understanding its process would certainly help us understand
entrepreneurship as a whole and improve our businesses.
A Start-up On Venture Capital
The world is full of opportunities. It offers a wide array of chances for every bit of
living creature to be able to improve on the quality of living especially for the
human species. It has been proven through time that because of man’s inherent
curiosity and will not only to survive but also to breech through unchartered ways
of life existence is not merely limited on just a single step.
Instead, it is a continuous staircase that leads to everywhere all depending on

the heart and focus of the individual to reach greater heights. The business world
is one good example of how a handful of people have made it towards the
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pinnacle of success and one weapon these individuals used is a certain degree
of start-up knowledge on venture capital.
Venture capital is the technical term given to a kind of private equity which is
usually extended out to developing and growing companies that offers a high-
potential of success within its initial and early stage of existence. Also known as
VC or Venture, this capital is handed out by interested investors and highly
motivated and driven individuals who have monetary and financial resources with
the able assistance of reliable and committed investment firms.
Now these people just don’t show up with their money for free because ventures
are given with the knowledge that there can be an initial public offering or trade
sale that can take place with the involvement of the company to be financed.
Investors commonly play their cards within highly advanced and bankable
industries such as that of information technology and biotechnology circles.
The group in the middle of the action are called the venture capital firms. It is
typical for such group to build small yet credible groups of people who have
proven their worth in fields that they are part of such research, science, finance,
business, and other industries that are within the context of the capital firm. The
path towards a successful professional life in VC is quite tricky. You need to be
first and foremost adept with all the aspects of the game and you should also
have the knack and heart to carry on even though the tides may turn against you.
If you’ve got wild ideas of getting into the dynamic and challenging realms of VC
it would be a start to get updated information on which potential technologies can
be utilized in order to produce favorable returns even at their early stage.
People within the VC line also have the responsibility of guiding budding
entrepreneurial companies and enterprises at the initial phase of the company’s
operation. People with the type of expertise that these firms call for are needed
not only to provide additional means of capital but also cunning and skills for the
development of the company into larger scales of success.
The concept of venture capital is achieving great prominence due to the rise of
young and fresh companies that seek to come up with capital needed for a big
break but is faced with the problems of having a limited network in its early
operation and a raw status which is not adequate for debt offering or a banking
loan.
The only thing that these budding companies have to face is that control is not
absolutely on their side. VCs make sure that their efforts are not put into waste
by taking part in large decision-making acts as part of having a notable
percentage in the company’s ownership.
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The start-up phase of every business venture is, by fact, really tricky. Each form
of capital needs to be achieved with pure sweat and blood. Nevertheless, no
matter how hard a task may seem if you have the spirit to be on top then most
probably you’ll get your place with the elite.
A Firm Start-up On Your Venture Capital
The business industry is not a place for the weak of hearts. Each second is as
vital as each year that has been added to the existence of a certain company. In
this sense all efforts must be made to ensure that all activities and ventures are
running and operating in high quality and good standing. Although self-reliance is
a key factor in the start-up and growth of a business enterprise or corporation
there will always come a time that the current may flow against your party. In
such times there are venture capital firms that are willing and able to extend help
in order to salvage your dreams of success.
If you don’t have much of an idea how the mechanism of such firms work, then
you have to read along. Partnership is the key concept in venture capital firms.
There are so-called general partners who are the individuals that act as
managers of the firms and whose extent of responsibility includes investment
advises on the proper handling of capital funds.
There are investors on board who are considered as limited partners. The roster
of investors is composed of institutions and individuals having credible net worth
which means that they have the capacity to provide large amounts of capital
when the need arises. Insurance companies, mutual funds, financial
endowments, and pension funds are some of the capital resources that can be
tapped on.
There are different types of venture capital firms which can cater all sorts of
business there is. There should be a considerable amount of time and effort to be
dedicated for research when the need for these firms arrives. There are certain
criteria that you can set in order to identify with the capital firm that will really
coincide with the needs of your business. Let’s take a look.
First thing to look at is the business policy which involves knowing whether this
organization works with businesses on the starting phase or with businesses that
have been recognized fairly well. Then you must find out if the industry they
focus on match the industry your business is part of. You also have to make sure
that the investment they can put on the table can suffice the amount currently
needed by your business. With this in mind get into the shoe of the other party
and find out what sort of investment return is expected from your side. Last but
not the least you have to have an understanding as to what extent of involvement
this firm is willing to give.
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Aside from the common venture capitalists that are commonly present within the
firm’s circle there are also other characters that you have to acquaint yourself
with such as venture partners, entrepreneur-in-residence or EIR, associate, and
principal. Basically venture partners bring deal to the table and thus are only
compensated due to the successful negotiations that they invite.
EIRs are part of the temporary army of the firm. They are highly regarded as
experts of certain fields and are called on based on their qualifications for a
certain agreement. Individuals belonging to the associate posts are considered to
be on an apprentice phase wherein each level of promotion can lead to a
principal position. Now if you’re on the principal status and show enough
brilliance in your work then you’re headed to the office of a firm partner.
Think about this. No matter how good you are at every single business venture
and you’re start-up record is quite impressive a single wrong turn can lead you to
a position in dire need of extra capital therefore you should know every inch of
detail about venture capital firms.
Getting Start Up Venture Capital
A start up venture capital is a means of funding usually aimed at start up

businesses showing a lot of growth potential. Venture capital is just one of the
many options available for start up companies to raise some cash in order to put
their new business idea to work. Here are some of the basic ideas that one
needs to now about venture capital.
Venture Capital Firms

When start ups today want to obtain some venture capital, they usually have the
venture capital firms to face. These firms are made up of venture capital fund
advisors that manage a portfolio of venture capital funding coming from different
investors. Those who directly manage the venture capital funds are known as the
managing members. Those who invest into the firm that becomes a part of its
venture capital portfolio are known as the limited partners.
Venture Capital Firm Types

There are different types venture capital firms that focuses on certain types of
businesses to invest in. These firms may approach each business differently
depending on the industry they belong. It is important for start up businesses to
carefully look into the investment model that the different venture capital firms
engage in before approaching them.
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Seeking Venture Capital
For a start up business looking for some venture capital funding, research on
certain venture capital firms may prove essential. This will help increase chances
of seeking venture capital for a certain business. Some venture capital firms may
be investing in start up businesses while others concentrate on relatively new but
already established businesses. As mentioned before, many venture capital firms
also concentrate on putting a bulk of their capital portfolio in a certain industry
that they feel comfortable investing into. It pays for start ups to try and find out
which venture capital firms to approach that really invest in the industry that they
belong to.
Also key to getting some venture capital funding is by trying to find out if certain
venture capital firms may be able to provide the sufficient capital that the start up
may need. It may also be important to know the geographical scope of funding
that the venture capital firms provide. There are firms that provide funds to start
ups that tend to go global. There are also firms that are more focused on funding
start ups in their region or on the national front.
Another thing to consider when seeking venture capital funding from firms is what
they expect to get in return for providing venture capital financing. Different firms
have different standards concerning return of investment for the venture capital
that they provide to start ups and new businesses. It is quite important for
businesses seeking such financing to first know about the agreement that they
might be getting into when seeking venture capital.
Another important thing to consider when start ups seek venture capital is the
level of involvement that such firms would likely have in the new business. There
are venture capital firms that may seek a bigger role in the control of the new
company while there are others that seem contented to leave start ups a certain
level of independence with day to day operations.
Knowing about all these would help start ups seek the right type of venture
capital financing in order for their business ideas to come into fruition. Getting the
wrong venture capital firm can sometimes prove fatal to certain businesses that
usually lead to failure.
Business considerations for startup venture capital
If there were one financial grant that is hard to get, that would be the start up
venture capital. This is because this type of private equity is rarely given to
groups and even companies because the "venture capitalists" adhere to high
standards of work and income probabilities.
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These days, there are those venture capitalists who consider a number of grants
since the nature of the equity itself is closely linked with creation of jobs, greater
economy and industry knowledge, as well as a great alternative for innovation in
a specific geography or an economy.
Starter tips on venturing into a business
Today, startup venture capital is one of the most common options of companies
and business that are just starting. It is also an option to those with restricted
operating history—either too small business nature to raise a capital or too
"immature" to even qualify for a bank loan.
If you would want to opt for a startup venture capital, you should think carefully
what are the risks of the business that you are about to start. Indeed, running
your own business is a rewarding but demanding career and life choice. There
are many different opinions about how to start business—from writing and
researching a detailed business plan to jumping into a passion and trying to
make money out of it—but it still boils down to one thing: a collaboration of all
talents and efforts are needed for a business to work.
If you are planning to come up with a business and later on apply for a startup
venture capital, here are some tips on how you can start:
1. Always start with an idea. This doesn't have to be a brand new invention or
new product. In fact, many successful small businesses have found a way to
deliver an existing service more efficiently or economically or have customized
an existing product or service.
2. Put together a business plan. This doesn't require hundreds of pages with
thousands of charts. Use the plan to research things like how much you can
charge for your product/service, how much it will cost to produce or deliver
(include variable & fixed costs), and the size of your potential market—like
number of customers. The plan should evaluate your competitors - how many
competitors, how strong are they, where are they, how will you compete. The
plan should state what is required to enter this market, barriers to entry such as
high fixed costs—factories, restaurants—and government regulations that must
be met.
3. Determine if you need financing. Your business plan will include a section on
financing. How will you pay the costs to start and run your business? Do you
need a bank loan? Use credit cards? Self finance? Also, you'll need to consider
how much salary you need to support yourself while starting your business.
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4. Put together your initial marketing plan. Even before you think of getting a
startup venture capital, you should be contemplating on this. Marketing need not
cost a fortune. Some businesses require very little. For example, many service
businesses such as accounting firms build their practices through word-of-mouth
referrals. You can also join free or low-cost associations to build awareness of
your small business. Again, your business plan (product, customer, competitor)
will help you determine the marketing efforts you need to undertake.
Business Venture: Mistakes On Raising Startup Capital
You have a great business venture idea and you are raising startup capital but
why is that nobody wants to invest in your business? There is always room for
improvement. There are several mistakes on raising startup capital that could be
the reason why it is difficult for banks or for venture capital firms to invest on your
business.
Robin Cross stated in her article that there are 3 groups of mistakes made when
raising startup capital: “poor preparation, structuring the agreement and
managing the money.” This is truly the reasons why entrepreneurs would find
their loan applications and investment applications rejected. By avoiding these
blunders, then there would definitely be a higher possibility of having your
business financed.
Poor Preparation
There are entrepreneurs thinking that enthusiasm and passion would be enough
to start and keep a business. Unfortunately, if you are looking for a startup
capital, investors are not only looking for proper attitudes, they are also looking
for a complete and solid business plan.
When going to a meeting with bank or venture capital officers, you would like to
be prepared with your business plan. This would show how important the
venture it is. Nothing is more disastrous when an applicant files an application
that has incomplete business plan.
You do not need just funds; you would also need management skills. Another
common mistake is forgetting about the managerial aspects of the business. A
bank loan grantor and venture capital investor are looking for something when
they meet you, how you will return their money and investment. Nobody could be
successful without relying or having somebody to help. You would have to get
the best people out there.
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Structuring the Agreement
There are surveys done by U.S. Bank in 2004 showed that there are small
businesses who fail because they start with little amount of money. Most of the
entrepreneurs who applies for starting capital are actually asking for the amount
based on the best performance of their business. It is important to calculate the
amount you will be needing in the worst scenario that could happen.
Others would commit mistake of actually not being too conscious about the legal
agreements. If you are not confident with dealing with angel investors or VC
firms, then it is for the best to get a lawyer that has experience about this kind of
agreements. This would ensure that the terms would not be taking advantage of
you and your business.
Managing the Money
Proper management is the key. It is natural to have difficulties on the first year,
but overcoming it is important. There are entrepreneurs that would start a
business just because of getting excited over it, but once they experienced a
difficulty, they would let it go completely. When having difficulties with business,
some entrepreneurs tend to keep the problem to themselves.
That is something you should not do! Look for people who can help you. Of
course, there are mentors who are willing to help you out with your business
issues. Asking for help or guidance is not a sign of weakness, rather it is about
acknowledging your weaknesses and working to overcome them.
You do not have to build a fortress around your business, community

involvement can help you get additional business contacts and at the same time
impart your blessings and knowledge to other people.
Your business venture would benefit a lot from startup capital offered by different
institutions. But it is not just enough to get the capital, what happens with money
when it is already in your hands would decide what would happen to your
business. Startup capital for your venture is just a boost.
Choosing The Right Venture Capital Firm For Your Startup

Business
Not all venture capital firms offer startup capital for your business. There are
venture capital firms that are focused on a specific kind of capital, so it is
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pertinent to research about the capital venture firms that would cater to your
needs before you even think of approaching one.
Venture capital firms have specific requirements when an entrepreneur applies

for their startup capital services. A great way of increasing the possibility of your
business plan getting funded by a VCs is knowing their requirements and
evaluating if you would fit into what they are looking for. You could narrow down
your VC choices to a specific group that would display high probability of
accepting your business plan.
Some venture capital firms would only fund those companies or business within
the proximity of their headquarters. If your target venture capital firm has
geographical limitations, then you could look for VCs that does not have any
particularity on location or you could look for a credible VC within your area.
Aside from the location or proximity requirements, look for venture capital firms
that have experience in your field. For example, if they already have an existing
and former portfolio company which is in the same field as your future business.
You could look in the company’s records if the VC were able to help the
business. This would give you confidence that the VC would be able to help you
with your business.
But how would you know if the venture capital firms in your area are credible?
Ask around. You will be surprised that people in the community, like lawyers and
accountants, would know something about the venture capital firms. They can
give you information about the personality and experience of the venture
capitalists.
Aside from asking around, there are also published materials where you could
check their portfolio companies. You could check the company websites or talk
directly with the portfolio companies of the VCs. If a VC firm’s portfolio shows
that they have considerably great success with businesses that have the same
nature as yours, then there could be a probability that they will be investing in
your business proposal.
When conducting a face to face meeting with the portfolio company’s CEO or
officer, make sure that you would be asking how the venture capital firms would
conduct their relationship with them. VC firms would often be a group of
investors or affiliates of an insurance company or a bank. You can also ask
about the partners of these VC firms.
Do not be inhibited when asking about the reputation of a venture capital firm.
Let’s put it this way, if you apply for them, they would surely ask about you and
your background. It would be fair enough to learn if they are doing their business
well before you go ahead with a business relationship with them. When looking
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for a venture capital firm make sure that you would working with a firm that
maintains a good communication and profitable relationship with their portfolio
companies.
Another thing that you could consider would be the assets of the venture capital
firm. Even if you are just thinking about applying for a startup capital in the
venture capital firm, do not deduct the possibility that you could get an expansion
capital or a second stage funding from them.
In a way, it would be beneficial for you since you will be getting somebody
experienced following the development of your business.
Choosing The Right Venture Capitalists
Start up venture capital is something that is not easy to come by even for a
seasoned entrepreneur. Only a single lucky entrepreneur on average out of 500
others aspiring for the same thing may be able to get some venture capital for a
business. It sounds quite a challenge for the many who strive to put their new
ideas and sell them as a business.
But despite the seemingly high mountain that entrepreneurs have to climb in
order to get some start up venture capital, many have the right amount of
confidence over their idea that makes the strive and strive even further. And for
the new budding entrepreneurs out there, it is not just getting some venture
capital financing that's important, choosing the right investors to provide it may be
as equally important.
Many venture capitalists seem to be quite a puzzle for many entrepreneurs vying
for some much needed venture capital to hatch their business ideas. Many
venture capitalists seem to have their own different tastes and preferences when
it comes to investing. It is this very reason why entrepreneurs should basically
start out by researching on the different venture capitalists’ firms in their area and
find out which ones would be able to provide the right kind of venture capital for
them.
One of the key things that entrepreneurs should consider when choosing who
among the venture capitalists to approach is their industry of choice. Venture
capitalists are known to invest in niche markets and industries. But most of them
specialize in a certain industry that they think would provide the most gains for
them. Venture capitalists rarely venture out into several different industries. They
often focus a bulk of their investments in an industry that they understand and
somehow had some good experience in.
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Entrepreneurs looking for some start up venture capital should try to look for
venture capitalists known to invest in their industry of choice rather than just
presenting a business idea to just about every venture capitalist in town.
Targeting those who invest in a specific industry that your future business
belongs in would help improve your chances of obtaining some financing.
Another important thing to consider when seeking out venture capitalists is their
geographical preference. Aside from specific industries, many venture capitalists
follow a style of investing that involves some level of geographical location. There
are venture capitalists that only invests in businesses that might be operating in
the city they belong in. There are those who focus on investing in businesses
outside of their local area. There are also others who focus on investing in
businesses that am to spread out internationally.
There are also venture capitalists that invest in companies already at a certain
stage of progress and development. Venture capitalists don't necessarily invest
their money in start up companies. There are also others who focus on looking
out for businesses that may already have started out up to a certain level. To
them, this might help lessen the risk that they are taking when investing in a new
type of business.
This is also another important thing for entrepreneurs to think about when trying
to fine the right venture capitalists who would provide them with the capital to
nurture a potentially interesting business idea. It is not just the amount of start up
venture capital that matters. Getting it from the right source also may be crucial
to the success of the new start up business.
Foundation for startup capital venture
Getting startup capital venture is hard. But if you made sure that your business
endeavor has good foundation—a great probability for growth. Then, the chances
are greater for you to get a venture capitalist that would invest on your project or
business.
Aside from the advances in every aspect of a person’s life, the dawning of
modern technology, especially the information technology, has opened the door
to so many possibilities. The emergence of the mainstream information gateway
has also opened several opportunities to different industries, businesses and to
the ordinary people as well. One of these best foundations to get a startup
venture capital is to make and manage business in your own abode—the home
business.
Starting small
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Indeed, home business— if properly defined and managed—can give you quick
and easy money. Since deciding to create a home business can be one of the
biggest decisions you may ever make in your lifetime, numerous financial groups
emerge to help you understand the importance of having thorough information
and trusted resources while exploring your business investment options. If you
are looking forward to do a home business, these groups will also help you buy a
business meant for you.
And if you truly decided on to manage a home business, these groups may even
help you identify and explore the best business or franchise opportunities for you.
They will also try to determine the correct value of a business you are
considering for purchase and the may even help you pursue your ultimate dream
of business ownership by helping you out in finances.
Starting a home business can be easier than you may ever imagine. Of course,
there will always be a series of steps to be followed but don’t get tired of them
because most of these are easily be obtained and require little frontline
investments. Example of such is the type of most home businesses based on
profits from a web that require the least amount of capital expenditures and
setup.
Before indulging into a specific home business, you must have a true sense of
what is really involved with starting and developing a successful home based
business and stand by for realistic expectations. A home business can give an
“overnight success” but it doesn’t mean that an “overnight” is all you need to start
one. Unlike in the traditional business with traditional work force, once you have
selected the home business that you plan to pursue, there will be no substitutes
for the time and effort in developing it. And once you have paid the necessary
dues, you will begin to have real success with a home business.
According to most people who have been successful in their own home
businesses, having an entrepreneurial mindset is the key to unlocking one’s
creative flow, willingness, and determination. And even if you’re not familiar with
the big and complicated world of business, you can still start building home
business because is not limited to those people who have had years of
background and experience.
To ensure that that you will get startup capital venture, you should have a good
income objective. But, in the long run, you will start to have other sub-objectives
like time flexibility and schedule.
You should also consider your home business’ mission statement / business
objectives; branding, logo, and marketing; stationary and branded materials;
incorporating; business name; incorporation; trade marking; copyrighting;
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advertising and marketing and software and licensing; computer equipment;
employees or contractors; and ongoing costs and expenditures.
Plan Plus Venture Equals Start-up Capital
The journey of life is full of twists and turns. You will never know that it is there,
good or bad, until it hits you so hard on the face. The fact that life is very
unpredictable makes it more enjoying and challenging. Only a handful really
appreciates this facet of life because these people know that whatever happens
they are ready to play a tug-of-war game with life’s success and setbacks.
You may then ask how it is really done. There is one thing that comes into mind.
Planning with effective and strategic ways before starting a venture into
nothingness really boosts your chances. This is not so much different in the ever
so dynamic world of business. You need to plan to come up with your start-up
capital.
Budding and adventurous fellows in the business world are put into a halt when
the term start-up capital is laid on the table. This is for the reason that it is very
vital in visualizing how far and long the business will push through. That is why it
should be given proper time and thought so that everything is put into proper
places.
Basically start-up capital is the thing you need for your business to bloom into a
majestic and enduring entity. The range of aspects that it encompasses includes
every step involved in developing your product or service and then catapulting it
into your desired market. Start-up capital makes your business run, operate, and
work. Thus you need to understand how much monetary source is adequate to
put your business at first gear then you must also identify how this certain
amount should be prudently allotted so that nothing comes into waste and
immediate loss is avoided.
It has been instilled in your young mind that before you even step one put
forward you must at least have an idea of what will happen next. This is a key
principle to success. In lieu with this, decision-making and actions associated
with your start-up capital is backed up by a very effective business plan. A
business plan gives people you run for monetary help an idea of what type of
person they are dealing with so you better work extra hours in making the
executive summary of your plan flawless.
Let’s face it financing assistance is part of the business circle so do yourself a

favor and do well in your business plan in order for the financing people to realize
that they are getting their money’s worth with every word of proposition present in
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your business plan or else you may find yourself getting the biggest gut blow of
your life.
You also have to know the answer for one of the biggest question in your
business career and that will be where will be the specific allotment of the
monetary resource that you are going to gamble for the pursuit of success. You
have to picture everything like a machine running on every gear which means
that all is crystal clear that the money will be spent on the most prioritized facets
of the business. This is significant especially when things get out of hand but you
can push through because as what is being emphasized here you have
everything mapped out from plan a to z.
Lastly, before you begin shooting into a big business venture make sure that you
plan for your start-up capital based on principles that will first and foremost
escalate your career into greater heights.
Reasons To Avoid Start Up Venture Capital
Although there are many reasons for new businesses to seek start up venture
capital funding, there might also be many other reasons why some businesses
might want to avoid it. Venture capital financing is basically funding provided by a
certain venture capital firms to help new businesses start out their operations.
Venture capital funding is just one of the various options that businesses and
start ups may consider when trying to come up with the necessary capital.
Although such options provide a great means for a new business to have the
opportunity of starting out the right way, there are reasons that may hinder some
start ups from seeking such funding for their new company.
One of the reasons why some start ups avoid seeking venture capital is not just
because it may be pretty difficult to get at times, but it can also be a source of
distraction over the other important things in the business. Some entrepreneurs
can get so into getting additional venture capital for their businesses that it
becomes the primary means to let the business survive.
Sometimes it can take the place of actual entrepreneurial tasks such as selling
products are providing services that customers actually want. Such ways may
help keep the business going, but it seems to postpone final test phase to see
whether a certain business idea would really survive in the marketplace.
Another thing why some businesses may avoid seeking venture capital is that
many firms that usually provide the funding may not be always on the consistent
side when it comes to supporting businesses. A lot of venture capitalists usually
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go for what is currently the best out there. They sink their money into something
that may prove to be the trend in today's market.
Whatever is hot right now, that is where most venture capitalists seek to put their
money in. A lot of other business ideas may not be given the same attention no
matter how attractive they may be. Some entrepreneurs get concerned that
venture capitalists may leave them by the wayside at some point when the
industry they are in no longer becomes part of the hot trend in investments.
Other start ups never bother with seeking venture capital funding because it can
do a level of damage to businesses in many ways. For one, some venture
capitalists seek out to gain more from their investments by trying to get the best
discounts and concessions from the companies that are in dire need of their help.
When most venture capitalists know that a certain business is in dire straits and
would immediately bee seeking aid, most of them would resort to stalling and
putting companies in the brink of failing just so to extract additional concessions
at the last moment for their own benefit.
Not only that, there are venture capitalists who expect to exert a certain level of
control over the companies that they have provided some venture capital funding
into. Sometimes, this can get way out of hand that the actual business owners
may no longer have personal control over the company. It can sometimes go the
way of the venture capitalists running the company themselves.
It may defeat the purposes as to why some entrepreneurs went into the business
in the first place. The business that they dreamed to nurture and grow over time
can sometimes be taken away from them by venture capitalists.
Start Up Venture Capital Funding
Start up venture capital funding is something that many entrepreneurs new at the
game would be effectively seeking. But it is not always that easy. Venture
capitalists also are very selective when it comes to the different businesses that
they seek to fund and help out with so much needed capital. For one thing,
venture capital investors are into the industry in order to gain some profits
themselves.
In order for entrepreneurs with good ideas for a business to become successful
in getting the funding that they need, there are some things that they should need
to know about venture capitalists’ ad the industry. One of the most important
things that they should learn is that venture capital funding is never easy to
obtain. It takes quite a great deal of convincing and persuading venture
capitalists in order to avail of their money. They have to be persuaded that the
business that you are trying to plan offer a high growth potential which attracts so
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many venture capitalists. It is the only way that venture capitalists can ensure
that they get their money's worth when investing in a new and untried business.
Most venture capitalists usually also would like to have a hand in trying to set up
a new business that they have invested in. they usually would want to be quite
involved in the whole business process actually. From idea generation, start up,
operations and their exit, venture capitalists would want to be involved in the
decisions and plans just to ensure their own investment.
When it comes to financing, there are basically six stages that such financing are
being offered to new businesses. It usually is being provided according to the
corresponding developments that typically happen in a business. There is, first
and foremost, the Seed Money. This is usually a type of low level financing
offered by venture capitalists.
Its main purpose is to help prove a new idea by actually testing them out in the
real world. After the idea has proven to have good potential for setting up a
business, venture capitalists then move on to provide start up capital. This is the
funds that will be then used to pay for expenses that are usually associated with
marketing and product development.
There is then the first round of funding aimed to help boost early sales as well as
fund the manufacturing process. A second round of venture capital funding may
be given to start up companies that have started selling their products but may
have not yet turned a profit. This would serve as the company's working capital
for the early stage of the business until it eventually makes money.
The third round of venture capital financing is commonly known as mezzanine

financing. It is the stage in the financing process where the new business has
started making a profit and is now planning to expand. The fourth round of
venture capital funding aims to further help companies go in the way of becoming
publicly listed. Also called bridge financing, this venture capital would help
finance the company's aim to go public and set up an IPO which may take a
considerable amount of capital.
This is basically how the system of start up venture capital funding works. It may
sometimes be modified, but the basics still remains the same.
Start Up Venture Capital
A start up venture capital is simply a type of private equity capital that is being
provided to fund start up companies with high growth potential. In its most basic
form, venture capital is being given in the form of cash by people known as angel
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investors. In exchange for the capital, the investors are given a stake in the start
up company in the form of shares.
History
Start up venture capital was once the domain of wealthy individuals and families
in the early 20th Century. There were notable families with riches that many
upstart businesses then relied on to help gather up some start up capital for a
business that shows some potential. In the United States, there were wealthy
families such as the Rockerfellers, Warburg and the Vanderbilts who were noted
for their investments on several industrial and private companies during the early
1900's. During this time, it was not yet known as venture capital but more
commonly called as developmental capital.
It was not until after World War II that venture capital investments ceased to be a
realm of wealthy families. Sometime in the 1940's, venture capital firms were set
up in order to help and encourage the private sector to invest in businesses. The
firms initially targeted returning GI's. These venture capital firms were the first of
its kind then in that they helped raised capital funds that did not come primarily
from the wealthy families.
Technology And Venture Capital

In the subsequent years, venture capital firms focused more and more on
investing in technology companies. It was s time when many technological
breakthroughs in electronics, data processing and the medical field were
rampant. The late 60's up towards the 70's saw many venture capital firms
eyeing investments mainly in technology. It was also during this time that venture
capital became almost synonymous with technology finance because on its
perceived focus in terms of investments.
80's Hardships
The venture capital industry first saw its successes bore fruit during the 70's and
the 80's. With many start up technology businesses sprouting up and became big
companies. This led to many other capital firms venturing out into trying to
provide start up funding to new businesses that show high potential for growth.
The growth of the venture capital market itself suffered as more and more
players entered into the fray.
With many venture capital firms increasingly looking for that next big thing, the
risks that they took to determine the potential of certain start ups for growth and
success somehow also increased. Many venture capital firms suddenly found
themselves facing declining returns that didn't seem to go well with their
expectations for some of the start ups they funded.
Along with the competition, occasional dips in the overall business climate also
affected the returns for most of the venture capital firms. It even worsened during
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the stock market crash in 1987 where many IPO's collapsed. This also led many
of the venture capital firms to close shop.
90's Boom
The 90's brought about a shake up in the venture capital industry that eventually
helped brought about much needed improvement. The boom came when the
Internet began making waves and the started the dotcom boom. This led to many
start up venture capital firms to provide funding to many of the online domains
trying to make their mark on the Web. It stretched until the year 2000 when the
dotcom bubble finally burst.
Startup Capital And Business Venture Risks
The worst case to happen with a business is for it to run out of funds and
eventually close down. In a period of economic downturn, less people are
spending their hard-earned money which is why businesses are barely thriving
from sales. If you are just a new business and you have gotten startup capital
from a venture capital firm or banks, the biggest fear is that the funds would not
be sufficient enough to subsidize the business needs.
Entrepreneur Risks
Entrepreneurs, when asking for financial support from venture capital firms,
would often base their financial need on the best scenarios. Unfortunately,
entrepreneurs are making mistakes of not incorporating or considering the worst
cases that could happen with their businesses that would require them to have
bigger funds. In short, they lack in preparing a second or backup plan.
There are also entrepreneurs who are preparing themselves for the difficulty of
raising the startup capital. But actually, that is just the start. More financial risks
are could happen when the business are already running. There are different
financial risks that could push the business to its edge.
There are the credit risks or customers failing to pay, commodity price risk could
happen when the prices of raw materials increase. If you are doing international
trade or dealing with international customers, the fall or the recovery of the dollar
could also affect trade and manufacturing relations which is called the exchange
rate risk. The se are just some of the financial risks an entrepreneur could face
while of the startup stage of the business.
These financial risks would be what we should keep in mind when looking or
negotiating with financial assistance from venture capital firms and angel
investors. Based on experience, it would be difficult to raise money immediately
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during a financial issue. So it would be important to take advantage of
assistance being offered on the first place.
Venture Capital Firm Risks
Venture capital firms also face financial risks. Investing on a startup business is
not risk-free. The fact that venture capital firms are not sure if these new
businesses would be able to survive its startup stage is already a risk. Especially,
if venture capital firms would only expect to profit within 5 to 7 years of the
business.
This is why venture capital firms are very stringent when selecting entrepreneurs
and business plans that apply for funding. VCs would have to analyze if the
entrepreneur and the management team would be able to cope up different
financial risks or problems that could happen to the business. They would ask
entrepreneurs if there are plans devised to address these kinds of issues.
Sometimes, venture capital firms would outsource a third-party firm that would
serve as consultants during financial risks and problems.
Businesses are not risk-free, regardless of what stage you are already in. It is
important for entrepreneurs and venture capital firms to prepare backup plans so
that they would be able to resolve issues and at the same time recover from it.
Which is why having a business plan is totally essential. As an entrepreneur, it is
not enough to remember what to do during these situations, it is important for
venture capitalists to see them concretely.
Raising startup capital for your business venture, is not easy. Maintaining your
business thriving is not also a work in the park. It is something that you would
put your effort into.
Startup Venture Capital 101
Startup capital is the capital that an entrepreneur needs to pay the necessary
items needed when starting a business, like business space, equipment,
supplies, and employee’s paychecks. Meanwhile, venture capital is the fund that
a venture capital (VC) firm or an angel investor would provide to a starting or
trouble-laden business.
Unlike loans, venture capital is invested in the business rather than being
returned. With bank loans, for example, the money borrowed should be returned
within a specific period of time along with interests and other fees. But with
venture capital, the money is provided in exchange of equity in the business.
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The venture capital firm would take part in the business, they could have one of
their own to be a member of the board of directors.
Aside from having a portion of the company, the VC would also have the right in
knowing the operation of the business. Their opinions would matter especially
when making decisions in the company. VCs rarely concern themselves with the
daily operation of the business unless the life of the company or business is
being threatened. Aside from this, the VCs’ opinion would also matter and they
could prohibit the portfolio company to close down.
The difference between a venture capital firm and an angel investor is simple.
An angel investor does not operate like a firm and more of a wealthy individual
who invests in startup businesses. An angel investor usually does the
transaction informally and privately. An VC firm could be a group of wealthy
investors or an affiliate of a bank or an insurance company.
Another difference between an angel investor and a VC is the amount that they
could give to the starting entrepreneur. VCs would normally provide funding not
less than $250,000. Angel investors on the other hand could give a smaller
amount than VCs but still in exchange of equity.
Not all venture capital firms invest on startup businesses. There are different
types of capital which depends on the different stages of the business. For
example, the seed capital would be mainly for research or planning stage.
Startup capital would be for the procurement of initial needs. The mezzanine
capital would be fore expansion and there are also later-stage capital or funding
which would be for transitional stages in the company. So before you bring you
business plan to a venture capital firm, make sure that they are indeed for startup
businesses.
VCs do not just invest on the next business venture. Currently, because of
economic crisis affecting us, venture capital firms would rarely invest in other
business but rather concentrate on their existing portfolio companies and make
sure that they are running well.
But even if we are not in an economic recession, VCs are still very selective with
their investments. They would have to consider the nature of the field where
your business will be a part of, geographic or location preferences, the product or
the service’s marketability, strong management and competition. Aside from that
VCs are known to accept those businesses that would enable them to profit big
time within 3 to 10 years, other within 5 to 7 years.
Application for a startup capital would require the entrepreneur to submit a

comprehensive and complete business plan. Some VCs would even require the
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list and credentials of the management team and financial projections. The
entrepreneur just needs to clarify with the VCs about the additional requirements.
To exit out of a business, the VCs would sell their share of the company through
an initial public offering or IPO to the company. The company or the business
could buy the stocks within the next 7 years. They could also exit through a
merger with another company, where the VCs would receive payment for their
stocks. VCs could also exchange the equity for money and the management
teams gets incentives from the equity.
We would need to understand capital venture firms and their startup capital
investment. In this way, simple, starting and young entrepreneurs could start their
business and know their options. If you have decided that VCs are the right
place to go for your business venture, then go ahead and present your plan. It
could be start of your success
Startup Venture Capital Essentials: Business Plan Writing
When applying for a startup capital for your business venture, venture capital
firms and banks would go to your business plan to identify if your business would
fit their strategies. The business plan undergoes a scrutinizing period and would
tell if you are serious about it. Therefore, it is very important to come up with a
proper business plan.
There are some entrepreneurs that think that just because they have a great idea
it would be sufficient enough. Unfortunately, that is not the case. If you show up
with a bright idea but an incomplete business plan, then chances are your
business plan gets dismissed.
Here are some tips for writing a good and solid business plan which would reflect
your solid business idea:
A vision-mission is important. Going straight to the business plan during the

meeting is insufficient. What you need is something that would make venture
capital firms and whoever would read your business plan what kind of values
your business is built on. You would need to make them understand both the
long-term and the short-term goals of your business.
Indicate what your market or your target customer base want. You do not launch
a business because “you” think that this kind of business would be ideal for the
market. You are building a business centered on your preferences, not on what
the customer wants. Include them in the plan by showing the market pulse, by
showing them numbers that customers really need your product or services.
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Do not underestimate competition in your business plan. Address the fact that
you have competition and devise a plan that would enable you to work ahead of
your competitors.
Leave some space in your business plan for additional information or changes.
Include in your business plan why your business would beat competitors, point
out what makes you unique.
You would also have to make sure that your business plan has all the complete
elements.
There is a format for a business plan and you should follow it. Here is the format:
Title page and table of contents.
Executive summary. This gives the VCs or the banks a general idea what your
business is about, what kind of industry and a short description. You can also
put it in the last part of the plan.
Management team and key personnel. People who are involved in making
decisions in the company should be stated here.
Description of the product or service.
Market research and analysis of the product or service. This would be where you
will show how profitable and “hot” your product is.
Marketing plan. Marketing, sales projects and promotion plan or strategies

should be included here.
Manufacturing schedule and production plan.
Financial plan. This is one is very important. Financial strategies and everything
related to financial matters should be stated here.
Risk analysis. You will describe what situations or occurrences can break your
company in this part.
SWOT analysis. An analysis about the strengths, weaknesses, opportunities and

threats.
Purpose or use of loan proceeds.
Summary. This summary would focus on the potential income that your business
is expected to generate from.
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Appendix or supporting documents.
A credible business plan would show venture capital firms, how serious you are
to raise your capital. And they would not doubt you and your future business
venture’s success and credibility.
Startup Venture Capital Essentials: Management Skills
Some people would think that raising the startup capital for a business venture
would be the difficult part. Contrary to that, keeping the momentum and
maintaining your business running would be the most difficult part of all. Most
businesses would fail, not only due to lack of funds, but poor management skills
and cash flow.
There is no special skill needed when starting a business. You just need to have
important skills and attitude that will help you deal with business difficulties and
different situations.
Discipline – Staying focus is very important. Some entrepreneurs would quit

after the first time they encounter a problem. It would need self-discipline to see
to it that you would carry something that you have started until the end.
Determination and Perseverance- these two traits go hand in hand. It would

take determination for a person to be able to reach personal and business goals.
It would take perseverance to continue even after a rejection or an initial failure.
Time management- some entrepreneurs would fail miserably in their time

management. But this is a very important skill that should be mastered. These
would enable an entrepreneur to carry out and prioritize responsibilities.
Knowledge- never enter a business you are clueless about. Of course, you could
learn a lot while handling or managing the business. But basic knowledge about
the product and services is important to keep the business afloat from
competition.
Management skills go simultaneously with these traits. Using proper

management skills will ensure that the business will survive. In businesses,
there is what we call the “rare sense.” This is an important business skill. Rare
sense refers to the ability to think straight regardless of distractions and business
issues that you have to deal with. Aside from that rare sense is also about
making judgments based on facts.
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It is perfectly normal for businesses to change the objective and style in
achieving these goals from time to time. As the business progress, the
management team should be able to identify the strengths and weaknesses of
their strategies and style. Styles should be changed from time to time to adapt to
new hurdles being confronted.
Startup stage usually last for about five to seven years. After this period, the
business should already be profitable, operational and sustainable. By this time
too, there should be some changes or addition made on the management team.
Why?
During the startup stage, the kind of people you need are those who are capable
of manufacturing the products or the services. The kind of people who would
ensure that services would reach customers and maintain these contacts are
what you need during the startup stage. But in the period that when the startup
stage is already over, then what you would need would be the team that could
ensure that profit would continue to grow and new customers introduced with the
products and services.
New business stages would mean that there is a need for new management
strategies and would need different management skills. An entrepreneur should
continue learning as their business develops. This would ensure that the growth
of the business continues.
Whether you are managing a large or small business venture, even if it is not in
its startup capital stage, you would always need to have the proper management
skills to keep your business developing and sustained.
Startup Venture: Sources Of Capital
During a startup venture, capital sources are a problem. If you are just a
beginning entrepreneur or it is the first time you will be venturing into a business,
then the most important question is how you start one if you have limited funds.
The truth is, where you get the funds would define how you will be paying the fun
and at the same time how to raise money to pay for it.
What is startup capital? Why do you need it? You would need the startup capital
so that you would be able to promote your product or your services. You would
need it to get your business financed. So even before you started running after
possible financiers of your business, you would to make sure that you would
have plans that would ensure that it will grow.
When we talk about getting a business financed, the first thing that comes into
our mind would be going to the bank and applying for business loans. The
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problem with banks is that most of their business loans would require the loaner
to have a business already. But there are also banks that would offer startup
venture loans. They would just need somebody to guarantee it and a good
business plan.
Another institution that could help with the loans would be private angel investors
or venture capital firms. They would require, still, a sound business plan and
financing plan. These venture capital firms would invest on your business but
they would require the return for a certain period of time. The transaction may
sound easy, but it is not. So if you are planning to get a venture capital firm to
finance your business, then you should also get a lawyer used to this kind of
transaction so they maybe able to assist you.
The problem we are facing now is that not all private angel investors are looking
for new investments. With recession on our backs, they are more into protecting
their current investments that getting another one. If you are facing these issues,
then there are still ways on how to get that startup capital.
There are some companies that still offer personal loans which range from
$10,000 to $100,000. Just make some research about these companies. But
these companies just do not allow a person to loan from them easily. They
would require that the person borrowing to have good credit and ability to pay the
loan. They would investigate if the loaner would have these credentials, and they
could be very stringent.
Friends and relatives are also big help in producing that startup capital. But,
remember, that when borrowing from friends or family, even if they are family,
you would still have to treat them like an investor. A loan is a loan. You would
have to figure out how you will be paying and the length of the paying period.
You just need to let them know that you will be needing assistance with your new
business and show your sincerity and confidence in your ambition and certainly
they would work with you.
In this period of economic strain, you will have problems getting your business
plan backed. You just need to have a solid business plan and dedication to
make it work. You do not need a sob story to get financed, companies are
looking at how their investments would return and you should include that in your
business plan.
If you cannot get the ideal source of funds, then you would have to start in the
bottom and slowly climb to the top. In any business venture, getting startup
capital is hard but once you get the success that you would want, its worth it.
The birth of a business through startup venture capital
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With the economic instability, people have to find ways to come up with more
viable source of income. One of these viable means include coming up with a
very own company that has high potentials for growth and success. Since not all
people have the financial means to do so, the most common option would be
getting a startup venture capital.
A startup venture capital refers to the type of private equity that is usually granted
to companies and businesses that are related to biotechnology and information
and communications technology (ICTs) because these are the fields that have
high probabilities of generating income returns.
Venture capitals are common in industries that are new and have high
expectations. Before a group or a company gets this, there are so many
requirements and processes they have to go through. If your company plans to
avail of a startup venture capital, you should be very careful about the business
that you are about to build.
Starting a Small Business
The main key to starting any business is an idea. A good idea can take you and
your soon-to-be business to greater heights if you start well with your venture.
Come up with an idea, product or service. Put it down on paper. You're more
likely to succeed if you plan. Put down things like name of the business, what
resources you need short and long term business and financial goals.
Next is by starting small. Here, the main motto should be: "Plan, plan, plan!"
When your idea is fresh and exciting, it's easy to start without a thought to how it
will pan out and all the implications. There's nothing worse than an uncompleted
project. It can completely ruin your confidence.
After that, it is best to chart your way to financial success. Here, you can
determine what price do you intend to sell your product or service for? How much
will it cost you to produce? Work out a roughly estimated profit remembering to
factor in fixed costs like rent, energy etc.
Then, you can check out your competitors and compare the business natures.
You can gauge how much are they selling a similar product for and if you can
add something to it to make yours different and hence a better price.
The next ideal thing to do is to put down your "Unique Selling Proposition." Also
how are you going to market your product—via newspapers, a website, through
word of mouth? The option is yours.
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Then, decide what type of business you would like to be -- an incorporation, LLC,
etc. This is important for tax purposes. Here, you can determine how you're going
to finance your business initially. The bank, venture capitalists, angel investors,
SBA grants (government), your own savings are all options.
After which, make your product/s or service/s available to as many customers as

possible by using your marketing strategy. It will also pay if you keep a close eye
on your running costs and keep them in-line with your projections.
Always remember that for you to be qualified for a startup venture capital, make
sure that your company's nature of business has high chances of growth. Make
sure that you get your accounts in order right from the start so it can save you
tedious work later.
Time To Venture For Your Start-up Capital
Let’s face it. It is a common knowledge between you and me that no matter how
people beg to disagree money really makes the world go around. It is used in
every trade of products and services around the globe and in order to supply and
your and your family’s basic needs, which really have expanded beyond foods et
al you, have to have a means of generating your own income. It’s a good thing
that there are many ways.
One is you go set off to a reputable company and work as an employee where all
your moves are monitored and rated and the other is well as most people put it
stand up on your own, be your own boss with a business. First things first you
have to realize that a start-up capital is a must before your craft, trade, enterprise
or whatever you want to call it can kick off so it’s time for you to venture and
learn.
Before even starting on all the good ideas that may make your business click in
public make sure you also have an idea of what a start-up capital is. Basically it
is the nutrients that will make a certain body system work in tip-top shape. But
how does it do such task. Let’s find out what takes place before a certain
enterprise no matter how small or big it is becomes a hit in its chosen market.
The business world is practically reigned supreme by the presence of monetary

resources. Money is needed in order to get things started and in better
perspectives and positions. The vicinity or the space required for your business is
acquired using money. All other details of the business such as instruments,
facilities, equipment, and fees for legal aspects such as professional
consultation, licenses, permits are also gained when you have the equivalent
currency for them. Manpower is yet another slot you have to fill in when you want
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to further expand your network within a certain market. The money here is
technically referred to as your start-up capital.
To have better grasp of how a business gets into full gear after years of fighting
in a certain market let me tell you a story about the other three friends of start-up
capital. Actually as this group work together the company achieves a longer life
span and gains a lot of gem and treasure in whatever field or industry it is part of.
Let’s start things off with Seed Capital. Now this guy starts it all for the business.
This guy is the representation of the monetary resource that needs to be present
in order for the primary and initial planning which is founded on a competently
and meticulously performed research.
After the work of seed capital is done then this is the time that Start-up Capital
enters the fray. This fellow is also known as Working Capital. He gets all the
hardware in good firing condition such as the supplies and equipment and well
other stuff as the lease for the space. But basically all the operations of the
business are in his hands. As the owner of your business it is vital that you get
acquainted with the final two.
Mezzanine or Expansion Capital takes you to the next level which involves
procurement of a more spacious vicinity and set-up as well as technologically
enhanced facilities and equipment. His presence marks the coming of age of
your business. Bridge Capital is called on to complete the transition as this guy is
the one that links your present finances with other plausible levels of financing.
Start-up capital is not that hard to produce you just have to get your acts together
and venture boldly to where no conventional soul dare to go.
Tips For Raising Startup Capital For Your Venture
You have a great business venture plan but no startup capital. That could be a
problem. But you could do simple steps to make sure that you will get your great
business idea the financing it needs. There are simple sources of capital for your
business venture:
Bank loans- bank loans are the first thing that a starting entrepreneur sees as an
option for funding. Different banks would have different requirements before they
agree to give you a funding. It is important to know what kind of requirements
they would need and somebody would guarantee your loan.
Government- the government has the Small Business Association (SBA) that
would help you get information about the requirements for applying a loan.
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Venture Capital firms- are businesses that invests on its equity and would later
on expect that a return in the form of buying stocks in the future.
Friends an family- there are starting entrepreneurs that would encourage their
friends and family into investing into their business but this would require the
entrepreneur to maintain an investor relationship with his friends.
Personal sales- you could start selling your unused items or items that are just in
your garage or basement. You might not know it, but you may earn a few bucks
from that.
Keep your day job- just because you have a great business idea, you suddenly
quit your day job. It would take a long time before you are able get financing. So
stick to your day job and it may even help you in having a starting capital.
When applying for a startup capital, whether it is in banks or venture capital firms,
having a strong business plan is important. Your business plan will be the basis
whether the bank is approving your loan or the venture capital firm invest on your
business. Therefore, you would need a good written business plan.
When writing your business plan, it should start with a mission-vision statement.
Vision is important for a business and investors would like to see that. In the
business plan, it is also important to state the short term and long-term goals of
your business. This would explain what you would prioritize as an entrepreneur.
You should also include market research in your business plan, this would show
why your business is necessary. This would also ensure the investors and the
banks that you are serious in understanding your customer base in order to
provide the best customer-oriented service.
Another part of the business plan that you should not miss is stating the budget
and the financial need. This is something that banks and venture capital firms
would carefully look at. In this part, they would have an idea where you will be
spending the money that they will be giving you.
It would not hurt if you will be stating the weaknesses of your business. Some
entrepreneurs would only state the strengths of their venture. But actually,
investors are looking for honesty. It is the responsibility of a good entrepreneur
to know his business’s weaknesses. You could also devise a plan on what
methods or strategies you will be doing to help address these business
weaknesses. A good business plan will show how serious you are going to be as
an entrepreneur.
When looking for startup capital for your business venture, it is not just about
strategizing and preparing an excellent business plan. At the end of the day,
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dedication, patience, perseverance, confidence and passion is what would
matter.
Venture On A Good Note Towards Start-up Capital
Guidelines and specific policies are laid out in order to avoid mistakes that may
cause the unwanted crash of your business. Certain principles from various
experts are charitably given out in order for you to end up on the rewarding side
of success. But despite all these efforts to make the business circles profitable
for almost every budding entrepreneur there are still cases that dreams fall apart
due to unforced errors.
Amongst these cases the concept of how to produce and handle start-up capital
is involved. Find out what should be done in order to come up with your initial
resources so that your business venture each day may bring you a step closer to
the Promised Land.
Although it really sounds, and may actually feel, good once you reach the top of
the chain it is not at all a walk in the park venture. It is a fact that due to the
abundance of milk and honey in the business industry a lot of people take their
chance in order to further increase their savings. Then the problem arises that
start-up capital must be acquired in its most sufficient amount.
Nobody in their right state of mind would take the risk of lending money and
supporting the finances of a company which have not proven anything during the
early stages of its business operations. This is the first thing you should accept.
Don’t take your heat on these people instead find innovative ways on how to
grow flowers in your garden.
Finance and venture firms won’t lend you their monetary resources unless they
see that you are worthy of such privilege and opportunity. So this is you first
move. You have to make sure that you come up with a certain plan that will make
them bite the bait on your proposed deal and once you’re their make a mental
note not to lousily stumble and spill all the milk that has been provided.
The road to financial and economic rewards is not an easy route. Thus you have
to give emphasis on mapping things out to near perfection. You can kick off the
fireworks en route to a good impression with people that can provide the needed
resources by preparing the best and effective business plan.
Think about this the people with the cash value their time and effort and going
into a business meeting is a serious matter for them so if you want to be on the
same page with them make it a point that you have all the artillery needed. A
business plan which is well-done consists of detailed description regarding the
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type of business and the range of its market, a reliable projection of the finances
involved, and an analysis of how the market may react upon the creation of such
business.
You should also avoid too much dwelling on your good product idea or creation.
Yes, you have in your thoughts the next best thing but apart from making
potential financers realize that your ideas is bankable you also have to take into
consideration that you have a number of professionals to rely on when things are
not going your way. The right accountant, business coach, or marketer is just
right around the corner. Don’t hesitate to have them on board if they can increase
the percentages of your winnings.
On your venture towards start-up capital, don’t place yourself in a big hole that
you cannot get out off. Make sure that there’s always enough money to go
around and sustain business operations. The adequacy of the resources you will
obtain is surely proportional with the amount of returns you can produce.
What is a start up venture capital?
These days, having your own business is really the way to go. But to those who
don’t have the machinery—the financial means and the contacts, a lot is needed
especially when they are planning to avail of a startup venture capital.
As defined, venture capital or "VC"—others also call it "venture"—is a kind of

private equity capital that is usually given to those business owners that have
their business in early-stages. But, it doesn’t mean that all business owners can
avail of the startup venture capital. It should be that the nature of the business
has high potentials in terms of growth and its general interest of generating a
return of income.
Today, the VC investments are usually come in cash. Before, it used to be in

exchange for various shares in the invested company. Among the fields where
startup venture capitals are common include technology industries like ICT and
biotechnology. Usually, VC usually comes from investors from various institutions
as well as from individuals with high net worth. These people are usually pooled
together by those firms that are really dedicated to their projects.
Current trends in startup venture capital
The trend when it comes to startup venture capital establishments these days
reflects the collaboration of teams with small number of people—who are usually
involved with the fields of technology—that include researchers and scientists.
Another emerging trend is startup capital venture for people that have
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businesses that are involved in training—more so that business that has years of
experience in the industry.
The very nature of a startup venture capital is that it is usually availed by a

number of people or companies that have "impenetrable" paths in career, thus, it
doesn’t only require just anybody but those really have expertise in a specific
field.
Applying for startup venture capital
If you already have a business in mind or a project, now is the best time to
seriously consider about applying for a startup venture capital. Usually, VC's
include necessary disclosures before it is given but these disclosures are usually
printed on the form to be filled out and also come with itemize rates and
associated costs in order to obtain it.
Today, majority of startup venture capital applications refers to non-taxable

money to be used in the partial or complete business project. Studies show that
startup capital venture can give more benefits if they given utmost priority.
In this industry, startup venture capitals are great because it does not only help in
the success of the project but will also affect the value of the company as well.
Most startup venture capitals require larger loan amounts but if you have planned
your projects well, you will be needing smaller amounts money and can get more
venture capitalists to invest on your project.
The usual process in applying for startup venture capitals include the application
itself which can be completed either online, over the phone, or through fax by
filling out the form. After it has been received, the representative from the venture
capitalist will then review your application if the details are complete. For new
companies, some credit reports are ordered as precautionary measure on the
part of the venture capitalist.
Using the information from that credit report and the information you have
provided in your application, the startup venture capitals will be underwritten
while conditional approval will be issued. After this, options will be made
available to the applicant and will be explained by the representative.
Why startup venture capital applications fail?
Today, one of the options of people for viable sources of income is through
business. This is because they feel that if they would have their own businesses
to attend to, they don’t have to work for the rest of their lives anymore. It is for
this reason that there's an increasing number of startup venture capital.
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But not everyone can get this. They have to adhere to strict guidelines and
procedures to be able to be qualified with the venture capital. To make sure that
you will be qualified for this, you have to ensure that the application would not
have loopholes even before you come up with a business.
Reasons behind failure
If you are planning to start your own business, aside from the "building blocks"
you also have to be aware why do businesses usually fail. Why? It is also
because of these reasons why the venture capitalist would not invest on your
company or your projects.
If you really want your business to succeed you would have to understand and
know what are the things that make a business fail to help you achieve success.
Here is a short list of the most common fatal mistakes of business owners of new
businesses and why their startup venture capital is usually rejected:
- Inadequate planning of the business. Every new business needs good

conceptualization and planning. Planning is the backbone of any business;
carefully planned a business can succeed without too many problems.
- Insufficient initial capital for start-up period and development stages due to
inadequate planning Most of the time a small business fails even before the
actual operational stage because of lack of funds, this happens because of the
lack of plans and the inability to execute the plans within the schedule and within
the parameters. Sometimes budget scheduling is overlooked during the planning
stage.
- Mistaken estimate of market demand for product or service. One of the saddest
stories that one would ever hear from a budding entrepreneur is the story of the
new miracle product that could change the world and that nobody wanted. Some
people easily fall victim to get rich quick schemes that they over estimate the
marketability of a product or a service. Be sure that you do your homework
before getting into anything.
- Lack of management ability. Lack of experiencing in managing people,

resources and time can also play a big factor in the success and or failure of any
business.
- Failures to select and use appropriate outside professional advisors.

Sometimes even small businesses need professional help, seeking the advice of
an expert will have long term effects on your business.
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- Inability to market product or services effectively. Introducing your product or
service to the public is a must for them to know you are selling something.
- Over dependence on a single individual or on a predicted specific event.

Sometimes people are just lucky to get that one big break but not everybody is
as lucky as the others.
- Failure to understand capital requirements of a growing business. A growing

business needs progressive funds.
- Poor timing of expenditures due to poor planning. Bad compliance to the

budgeting schedule leads to making unnecessary purchases that could be very
hurtful to your company's growth.
- Expedient rather than reasoned decision-making. Experts say the startup

venture capital requests are rejected because the business owners need more
than guts and instincts—most of the time calculated risks are what a business
needs.
© OBC

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Venture Capital Funding

The Publisher has strived to be as accurate and complete as possible in the

If your business has the mentioned limitations or operate as mentioned above,

Venture On How Startup Capital Works

When starting a business, an entrepreneur is faced with different issues. There

A Start-up On Venture Capital

Instead, it is a continuous staircase that leads to everywhere all depending on

A Firm Start-up On Your Venture Capital

Getting Start Up Venture Capital

A start up venture capital is a means of funding usually aimed at start up

Venture Capital Firms

Venture Capital Firm Types

Business considerations for startup venture capital

Starter tips on venturing into a business

Business Venture: Mistakes On Raising Startup Capital

Managing the Money

You do not have to build a fortress around your business, community

Choosing The Right Venture Capital Firm For Your Startup

Venture capital firms have specific requirements when an entrepreneur applies

Choosing The Right Venture Capitalists

Foundation for startup capital venture

Plan Plus Venture Equals Start-up Capital

Let’s face it financing assistance is part of the business circle so do yourself a

Reasons To Avoid Start Up Venture Capital

Start Up Venture Capital Funding

The third round of venture capital financing is commonly known as mezzanine

Start Up Venture Capital

Technology And Venture Capital

Startup Capital And Business Venture Risks

Venture Capital Firm Risks

Startup Venture Capital 101

Application for a startup capital would require the entrepreneur to submit a

Startup Venture Capital Essentials: Business Plan Writing

A vision-mission is important. Going straight to the business plan during the

Title page and table of contents.

Description of the product or service.

Marketing plan. Marketing, sales projects and promotion plan or strategies

Manufacturing schedule and production plan.

SWOT analysis. An analysis about the strengths, weaknesses, opportunities and

Appendix or supporting documents.

Startup Venture Capital Essentials: Management Skills

Discipline – Staying focus is very important. Some entrepreneurs would quit

Determination and Perseverance- these two traits go hand in hand. It would

Time management- some entrepreneurs would fail miserably in their time

Management skills go simultaneously with these traits. Using proper

Startup Venture: Sources Of Capital

The birth of a business through startup venture capital

Starting a Small Business

After which, make your product/s or service/s available to as many customers as

Time To Venture For Your Start-up Capital

The business world is practically reigned supreme by the presence of monetary

Tips For Raising Startup Capital For Your Venture

Venture On A Good Note Towards Start-up Capital

What is a start up venture capital?

As defined, venture capital or "VC"—others also call it "venture"—is a kind of

Today, the VC investments are usually come in cash. Before, it used to be in

Current trends in startup venture capital

The very nature of a startup venture capital is that it is usually availed by a

Applying for startup venture capital

Today, majority of startup venture capital applications refers to non-taxable

Why startup venture capital applications fail?

Reasons behind failure

- Inadequate planning of the business. Every new business needs good