What is Venture Capital?
Venture Capital is a means of financing new start-ups, but more so the development and expansion of existing businesses or the purchase of companies. In return for the provision of funding, the venture capitalist takes an agreed proportion of the share capital (equity) of the company.
Business angels are wealthy entrepreneurs who provide capital in return for being part of a growing successful business. As with venture capital, in return for their investment, the business angel acquires an agreed percentage of the share capital (equity) of the company. As most business angels are entrepreneurs drawn from the corporate market you can often benefit also from their experience and ideas as well as funding.
Venture Capitalists look to invest in businesses with a strong leadership team, a unique selling point or competitive edge and operate within a potentially significant market place. It is typically a common source of funding for technology, IT and other businesses operating in high growth industries, where the business would likely own minimal tangible assets to secure the funding against in the event of default and as such the risk of lending is greater which is reflective in the cost of borrowing. Venture Capital is an attractive form of raising finance for businesses that are either too small or have insufficient trading history to generate funding from banks and other financial institutions.
For more information on Venture Capitalists or indeed any of our other products and services, complete the Get A Quote, Contact Form or email email@example.com. Alternatively simply telephone our national rate number 0845 601 5343 or contact your local Harrisons office, details of which can be found within the Contact Us section.