The main focus of this type of financing is to create and build up an investment portfolio for businesses that have high growth potentials.
List of Venture Capital Financing
Venture capitalists expect higher return on their investment. They are hands-on investors and would expect at least 50% or more for their ROI. There are various types of venture capital financing to explore for qualified businesses:
These businesses and individuals help small business survive, thrive, and grow. The objective focuses not just on economic returns but on the mission of helping the company. However, as it is a venture capital financing, the goal to profit and secure their investment is still a priority.
The business basically directly sells stock to the public. Equity offerings raise substantial funds depending on the market conditions and other financial circumstances. There are many forms of equity offerings in various structures. They all require careful oversight and research which is mainly a work for the legal representative of the venture capitalist.
The financial assistance comes from the federal and state governments. This includes tax credits and grants that are intended to start up or expand qualified businesses.
This is a special type of financing instrument that is designed for long-term financing. The tool is quite useful for new and startup companies. It encourages investment through minimal downside risks. The financing also offers upside potentials as warrants are security tools that enable the warrant owner to purchase stock at a pre-determined price in the future. For instance, a startup company issues warrants to the venture capitalist as part of reimbursement of the borrowed funds.
Initial Public Offerings
IPOs are granted to companies that have management stability, profitable operations, and strong market demands. The qualified companies are usually those that have been operating in the market for several years. Private issuance of funds to new companies is possible as well.