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Understanding venture capitalist

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If you are planning your career in a corporate field and aspiring to become an entrepreneur then one of the biggest hurdles in your way is acquiring the desired amount of capital, and Venture Capitalist can help you in overcoming that

This is one big thing that most of the budding entrepreneurial minds are worried about and some of them even drop their million-dollar idea midway with lost hope.

It is true that businesses having turnover worth millions are not established without any initial investment but it is also true that all the investment is not required to be from your individual side. 

Hold on! Don’t think about taking a humongous loan and drowning yourself in repaying that amount your entire life neither you are required to beg and plead in front of your family and family to maintain funds and selling some property and withdrawing the saved money from the bank is definitely not the option. So what’s really the option is? In just two simple words “venture capitalist”. 

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READ: How to prepare a pitch for a start-up?

The simple breakdown of Venture Capitalist

Meeting investors

On an easy analysis of the word, we’d get two words that are venture and capitalist. The venture is something that you plan to start your business with. The abstract noun is the plan or the idea in which you want to invest and start a business or a start-up. You can easily relate to the term business venture in this context. Now you are well aware of what exactly this word means. Without a plan no further planning is possible. 

Moving on to the other term that is Capitalist. Someone whether it be you, any of your family members or a third party who is ready to invest in your business venture and provide you with the required amount of capital (land, money) is the capitalist of your business.

In this continuation, the venture capitalist is some company that is ready to invest and provide you with the capital to kick start your business. You may also refer to them as an investor in plain terms.

READ: 5 tips get angel investors on board? 

Understanding Ventrue Capitalist with an example

Getting funds

To know the subject more clearly consider an example in which there is a company that wants to acquire some capital for its expansion. It divides the amount required in shares, now these shares are out in the market for the common people or other business groups to purchases.

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After such a process of selling and buying the business successfully manages to gain some capital and has also gained some investors known as venture capitalists. For a new business enterprise, it becomes difficult to list out its shares in such a way and the public is also not likely to invest in a budding start-up, here venture capitalists fit in the frame. 

Doing away with the myth

Most start-ups don’t urge a venture capitalist because of a buzzing myth that they do not help new start-ups. Such a belief is absolutely void as it does hold not any credence. Usually, the organizations that invest are much better off and do not hesitate to take risks on a speculative basis. 

Your idea should be good and profitable, that is the minimum requirement.

READ: Business incubators: a necessity for Start-ups?

The four-player game

Four player game

The market can easily be divided among four major players who are entrepreneurs, investment bankers, investors, and lastly the connecting link which we call the venture capitalist. The venture capitalists lay the pitch for the other players can make profits out of them by working out things between the three.

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Is repayment difficult?

Repaying the capital

Well, this is something important can should be considered while opting for venture capitalists. Repayment of the raised capital has to be made but there no hazel in the process which is a good thing.

You should always keep in mind that the smaller the amount the easier it would be paid off. So it is advised that try to raise a minimum necessary capital for the initial onset of work. The duration of the loan should also be kept in mind.

Extending it beyond a limit is highly unprofessional and may lower your goodwill. With maintaining low debts for the business you are all set to opt for this method.

Conclusion

Brands who raised funds through venture capitalist

Brands that have captured a significant portion of the market like Flipkart, Amazon, Ola, Snapdeal were all started by raising some funds from venture capitalists. So this method holds high creditability in all essence. There are some great companies as well who provide quality services in this field. 

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sanskriti gupta | GENUINE MATTERS
Sanskriti Gupta
Like researching, reading and dwelling deep in the topic to bring out the best of any subject matter, because Being opinionated is important and appreciated only if you have the appropriate and right amount of knowledge and facts to back up your material with.

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