Understanding Venture Capital

By Dr. Earl R Smith II
$4.95 Rating: Not yet rated.
Published: March 18, 2012
Words: 9,622 (approximate)
Language: English
ISBN: 9781476398600

Short description

If you have been successful in building your company to a certain stage, you will be tempted to search for the financial resources that will allow you to take it to the next level. The question is not if but how you will pursue that funding; whether you will adequately understand the new world that you enter when you begin to talk to angel investors and venture capitalists.

Extended description

The money chase has been the death of many good companies. There are a range of reasons why this is so. Some companies simply do not deserve funding - they are not an attractive investment opportunity. Others embark on the money chase too early. They haven’t established the business base to justify funding. Still others are run by people who seem to like the money chase better than running the business. All of these reasons and more make embarking on the search for venture funding a perilous business which risks your company and all it may become.

Over the years, I have worked with a large number of companies and management teams that have sailed these choppy seas. I’ve written this book to let you in on some of the knowledge - sometimes hard won - that I have accumulated.

I would be the first to admit that the challenges of getting funded are beyond the scope of this, or any other, book. My intention from the beginning has been to introduce an idea which I have found highly us.. (Read more) The money chase has been the death of many good companies. There are a range of reasons why this is so. Some companies simply do not deserve funding - they are not an attractive investment opportunity. Others embark on the money chase too early. They haven’t established the business base to justify funding. Still others are run by people who seem to like the money chase better than running the business. All of these reasons and more make embarking on the search for venture funding a perilous business which risks your company and all it may become.

Over the years, I have worked with a large number of companies and management teams that have sailed these choppy seas. I’ve written this book to let you in on some of the knowledge - sometimes hard won - that I have accumulated.

I would be the first to admit that the challenges of getting funded are beyond the scope of this, or any other, book. My intention from the beginning has been to introduce an idea which I have found highly useful - that of "investment grade". My purpose has been to help founders see their company from the perspective of the investor and realize that that view is significantly different from the one they normally have.

Over and over again I encounter founders who have developed significant animosity towards investors. It's easy to find postings on the various social media sites that reflect this animosity. I recently came across one such thread in which the poster spent a great deal of time denigrating investors. Given that this individual was an entrepreneur who was seeking funding, the behavior seemed counterproductive at minimum and self sabotaging. In fact contrary to what this individual was stridently contending, most investors are not stupid, Machiavellian, overbearing, dishonest or any of the other additives that this person was running around. I know a great deal about investors because I do a great deal of work with them. None of them match the description that this individual was putting forth.

The base fact is that the perspective of an investor is fundamentally different than that of a founder. But there is a collateral fact that is important. At critical times in the growth of the company these two different perspectives need each other. The company needs the financial resources in order to unlock the value that the founders have built up. Without those resources, the company will be in a substantial competitive disadvantage and likely will not realize its full potential.

So an accommodation between founders and investors is a gateway through which a company can progress to a greater future. Founders who realize this and are able to reach such an accommodation are the ones who end up running rapidly growing companies. If there is a lesson that I would like to leave you with, it is this:

Learn to understand the attitudes approach and objectives of an investor, except them as legitimate and honest reflections and then approach them in a professional manner, addressing their legitimate concerns and meeting them more than halfway on the journey towards mutual interests.
(Less)

Tags

venture capital, angel financing, venture capital primer, angel investing, angel investors, venture capitalist, entrepeneur, angel investor, venture funding, entrepeneurship

Available ebook reading formats

Single purchase gains access to all formats. How to download ebooks to e-reading devices and apps.

Format	Full Book	Sample First 15%
Online Reading (HTML, good for sampling in web browser)	Buy	View sample
Kindle (.mobi for Kindle devices and Kindle apps)	Buy	Download sample
Epub (Apple iPad/iBooks, Nook, Sony Reader, Kobo, and most e-reading apps including Stanza, Aldiko, Adobe Digital Editions, others)	Buy	Download sample
PDF (good for reading on PC, or for home printing)	Buy	No sample available
RTF (readable on most word processors)	Buy	No sample available
LRF (Use only for older model Sony Readers that don't support .epub)	Buy	Download sample
Palm Doc (PDB) (for Palm reading devices)	Buy	Download sample
Plain Text (download) (flexible, but lacks much formatting)	Buy	No sample available
Plain Text (view) (viewable as web page)	Buy	No sample available

Reviews

Log-in to write a Review   Log-in to add a Video Review

This book has not yet been reviewed.

Reason for report:
— Select a reason — Book is or contains spam Book infringes copyright Same content is published elsewhere with different author (for ex., by private-label rights) Duplicate Incomplete work (such as sample or serial) Should be marked adults-only Category is inappropriate Poorly formatted Nudity or other inappropriate content on cover Nudity or other inappropriate visual content in book Inappropriate erotica content Cover image is improper Content is inappropriate Other violation of Terms of Service Other reason not shown above.

Additional details: