Archive for May, 2006

Venture capital is a fund raised by a group of wealthy investors, which is then made available to small companies and startup firms. These small businesses and potential entrepreneurs usually have excellent growth potential but lack the funds to proceed. Because there’s a chance that the business may not do well at all, venture capital is also known as risk capital. Read the rest of this entry »

Venture capital and ‘angel’ investment seems like an attractive alternative to personal loans – you’re asking opportunity seekers to invest their money in your business in exchange for a share of the profits. While it can cost you more in the long run, it means that you won’t be borrowing money as a loan that needs to be paid back whether your business makes a profit or not. Read the rest of this entry »

The evolution of industries contains four basic stages: introduction, growth, mature and decline. There has been considerable research done on the subject, but rarely do we see written material specifically addressing the stages as they apply to a specific industry.  I would like to briefly look at the web hosting industry, trying to identify the value drivers and how they change, the signs of change from one stage to another, and each stakeholder’s interest and how their value changes from stage to stage.  In addition, I will make several comparisons to industries in the telecommunications world, because of the similarities in the business model, value drivers and stages of evolution.  Most Read the rest of this entry »

An angel investor is one who does not desire much say in the management of the company in which he invests, and also favors a slower return on investment. However, it should be borne in mind that they still make investments in the hopes of making a profit. Angel investor groups are important means of private capital and often put in angel money into fresh companies. Read the rest of this entry »

One of the leading career choices of college seniors in the past and still is today, to become an entrepreneur. Surveys continue to show that one out of three working Americans want to be their own boss. What’s stopping them? Lack of capital. Capital is the fuel that energizes the business.

Money is not difficult to find. Available cash always exists in great abundance, but you’ve Read the rest of this entry »

When a company decides that it must raise capital, a key question that must be answered is how much the company is worth. For example, if the business needs $500,000 to get started and/or grow, how much of the equity in that company should $500,000 command? Once this question is answered, the company will go out and try to find investors. When doing so, a key question often arises as to whether the valuation is “pre-money” or “post-money.” Read the rest of this entry »

Venture capital is a possible source of funding for new
relatively unproven enterprises that appear to have
promising futures. However, such money is often hard to
come by. Read the rest of this entry »

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You have a concept for a business, you have written a detailed business plan, and you have submitted it to literally hundreds of banks, financiers and venture capital companies and everyone has declined any further interest.

You cannot understand why absolutely no one is interested in your business venture. After all your concept is unique and the financial statements that you have put together, as part of your business plan, shows that the proposed business venture is going to make millions of dollars. Read the rest of this entry »

The rise of venture leasing and lending has created an opportunity for sophisticated entrepreneurs to gain a competitive advantage. Savvy entrepreneurs are using venture leases and loans to generate millions of dollars for shareholders by leveraging existing venture capital. They have discovered ways to use this flexible financing as a tool to build enterprise value between equity rounds and to leapfrog less sophisticated competitors.

Venture leases and loans are usually asset-based, financing arrangements. These financings are available to qualified pre-profit, early-stage companies funded by venture capital investors. Start-ups need equipment and working capital to help them execute their business plans and to reach profitability. Venture lenders and lessors provide financing to these firms to help them acquire computers, lab and test equipment, Read the rest of this entry »