The Role of Venture Capital in Creating Original Impact

Many are the investments taking place in society together. Every investor in the world is doing so with the essence of making an impact on society. Then does it mean that some investments do not actually bring impact to the society? Well, to answer this question, we are only basing on responding to the fact that venture capital is the original impact investing, even from the way it is set up. Why is it the original impact investing? Some of the reasons are listed below?

To start with, it helps in boosting productivity where it thrives on putting to use underutilized resources that are readily available. They create opportunities where technologies can be used to bring change. They also help in meeting the needs of society in a very effective manner yet affordable. This is because they produce products which are better yet they are very cheap to improve the lives of people. This is by employing new technologies making provision of goods and services easy.

Venture capital helps to prevent abuse of market power. Where venture capitalists are not involved, the market is lazy, dormant lazy and very uncompetitive leading to providing services that are not on point. Startup companies are therefore necessary on the market as they help in keeping in check the market forces. Venture capital; also has helped to increase market resilience. When the market is highly diversified, it reduces risks and can help develop shock absorbers for cases that would lead to the collapse of the whole system.

Lastly, venture capital has really helped in empowering individuals. This is because startups have brought employment opportunities to the people who are involved. This has made their living standards better.

Reference

https://www.forbes.com/sites/kjartanrist/2018/11/30/why-centure-capital-is-ther-original-impact-investing/#11e55cf953f3

Silicon Valley is the Hope of Venture Capital in the future

With time, a lot is the money that has been poured into Silicon Valley. This money has also later flowed into venture capital firms that fund and ensure that serious startup companies that portray serious ideas and at the end have a desire to grow into big business empires. VC investors, since 2013, have been able to raise more than 180b dollars that have propagated the growth of any startup companies like Uber, Lyft and Airbnb. These companies’ valuation has already bulged into billions. They have brought in a lot of profits.

However, it is important to know that even though all these are the possible outcomes of venture capital, funding the future is one of the realities that have hit the world yet cannot be ignored. It is a serious business yet at the same time financial rewards to do the same are not clearly guaranteed. This is the dilemma of development.

Some business entities which will be able to penetrate and make it to the public market are likely to groan and reckon because of this very reality. This is an indication of the high cost of growth that is inevitable. This same challenge could be a problem for the venture capital especially when the interest rates are highly n the increase while the stalks are falling.

What is most interesting is that despite the high cost of growth in the world, the future is coming and whether we like it or not, we must face it. Due to all these, Silicon Valley is likely to take the show to lead this development and growth. This is because the technologies and strategies employed by it are very necessary for this growth to be attained.

The meeting held by the roundtable meeting was prolonged and was looking at the challenges facing venture capital and the startups they support, emergent technologies especially those that threaten the existence of some companies and the way forward.

Reference

https://www.barrons.com/articles/silicon-valley-roundtable-on-the-outlook-for-venture-capital-51545439628

100K Ideas to Help Innovation in Business

A new venture capital group has risen to help new inventors in industry and entrepreneurship. This group which includes the heavy hitters in the industry, sports, and entertainment, Draymond Green, a native of Saginaw have come on board to be able to help introduce and develop a culture of innovation. They have come up with a young incubator company called 100K Ideas which is set to take inventors and entrepreneurs to another step of development.

In this company, many ideas are being developed which are highly innovative in nature. These ideas are to be accessed freely by any entrepreneur and inventor. The venture capitals responsibility is t assess the ideas to see if they are viable on the market or not. They will also assess to know who can benefit from the idea and what would be the right location to where the idea can apply. They also guide the entrepreneurs to know how to engage the idea and bring it to materializing.

100K ideas are located in the Ferris Wheel Building in downtown Flint and have been able to successfully host more than 250 ideas relevant for entrepreneurship and business products yet this is just its second year of operation. A national group known as the Shark Tank has also formed 100K Ventures which has helped to expand and create more opportunities for those ideas that are bearing fruit.

It is very common that many ideas have been come up with but just like 5percent has born fruit. So 100K Ideas has come to advance well-researched and viable ideas so that the efforts of entrepreneurs are not wasted by their ideas not being actualized. By this, many businesses have been helped by this venture capital.

 

Reference

https://www.abc12.com/content/news/New-venture-capital-group-aims-to-help-new-inventors-503356371.html

WHEN and When not to Opt for Venture Capital

many startup companies have always known that the readiest and available means of growing their businesses is through venture capital. These entrepreneurs are unable to remember that venture capitalists are in a business where they surely need to make 3, 5 or even 10 times more than the investments they have made. It is, therefore, necessary for every startup business to gauge itself and see if it will be able to rise up to the occasion to be able to give that much.

Must you always rely on venture capital to be able to grow your business? This is a one billion dollar question that anybody who starts a business must ask himself. When should someone invest in venture capital and when should him not be able to? Below are some factors to consider before venturing into venture capital.

To start with, every startup entrepreneur must assess to know if he will be able to make enough money so that the venture capitalists must be paid off and still the business will remain healthy and strong. Sometimes after the venture capitalists have been paid off, the business may dwindle in instability and later n crumble to the ground. Because you will not be left with enough capital to run the business.

 

Also, if the startup entrepreneur has enough money to run his business, there is no need to seek assistance from the venture capital. It is only prudent to seek venture capital if you know that you need enough capital to make you stable in the competitive market. This is because the other stronger competitors might be offering the goods and services that you also intend to offer and so for you to be stable enough to compete you need more money.

 

Reference

https://www.eu-startups.com/2018/12/venture-capital-knowing-when-and-when-not-to-seek-it-out/

A Question for Those Planning to seek funding from Venture Capital

Every startup company has got great ideas and wants to solve a certain challenge facing the society, the ideas are written down well and the entrepreneur is very passionate about the new product he or she wants to bring to the market. The only big concern has been where to find the capital to fund the business. Many have sought for funding from Venture Capital.

According to Rob Day of Hedge Fund and Private Equity, at this point many people have approached him to find advice on whether their step to engage in Venture Capital is a legit option. At this point, he has gotten into the business of expounding how important Venture Capital is in a startup business and how it would help the business grow very fast.

Nevertheless, he has had a one-dollar-billion questions to them, “Why are you raising venture capital in the first place, instead of another capital structure?” this, according to him, is a basic question which needs to be asked by all entrepreneurs since they have a perception that they can only be funded through venture capital.

One thing that the entrepreneurs must know is that Venture Capitalists come in with their own policies and structures which in most cases will not consider the entrepreneur. Their structure which is known as the “Preferred Equity” and “Liquidation Preference” usually will work to the entrepreneur. Many times they imply that the company will be sold after some time and they will get 5times or even 10times their initial investment. They also have an upper hand in decision making than the other shareholders.

It is thus important that startup entrepreneurs should cultivate other means of funding their businesses instead if just depending on Venture Capital.

Reference

https://www.forbes.com/sites/robday/2018/12/03/before-you-raise-venture-capital-you-need-to-ask-yourself-this-question/#5b5fbc0b30cf

Corporate Venture Capital is key for Growth of Startup Companies

With the increasing digitization of the industries throughout the world, many corporates have decided to take into corporate venture capital in order to acquire the much-required tools as regards technology and much-required expertise.  They have thus allocated huge budgets to fund research and developments.

It is, however, important to note that corporate venture capital is not the only way startup venture capital entrepreneurs can rise up the ranks in their businesses. It is just one of the ways a startup can be able to make it develop to stability. Depending on the diversification of a particular company, it will choose an innovation tool that will help it achieve its objective, without necessarily depending on corporate venture capital, which not everyone can easily get access to. However, the advantages that corporate venture capital has on startup venture investments unignorably enormous.

Some of the ways startup companies can be able to attract and make maximum use of corporates venture capital can be as follows. To begin with, a startup company can be able to transport a product that has already been tried and tested in a different market and found worthy. This will generate a very interesting business opportunity in the local environment. Since the corporates are looking for such innovative products will come in and invest in the business.

Secondly, the startup company can focus on a specific goal or objective to the market and adopt a technological tool to address it. The corporates will fling the business in order to support it.

Lastly, a startup company should invest heavily into a technology that has not been invested in before in their market. This will give them an opportunity to do something new that will attract the corporate bodies and their funding.

References

https://www.entrepreneur.com/article/324427

 

How Venture Capital and Private Equity Firms are strengthening their Teams

Recently venture capital and private equity firms are busy improving their teams by bringing in partners that can add value to the investee companies or induct partners that have a robust track record.

In fact, Kalaari Capital, a VC firm based in Bangalore persuaded Sreedhar Prasad to join their team. Prasad was a partner and head-consumer market & internet business, advisory at KPMG. Kalaari has witnessed 3-4 exits over one year.

Likewise, Fireside Ventures, a VC firm that targets early-stage investment in consumer space roped in Dipanjan Basu. He will play the role of a partner and chief financial officer. Additionally, he is tasked with initiating and managing new investments.

Basu worked for Myntra where he joined the company in 2016. Before joining Myntra, he was Wipro’s CFO and COO. Here, he was responsible for building and setting up new businesses. Basu was also the CFO of Quatrro Risk Management Services.

Although most seem to rope candidates from outside, a handful is promoting their own employees. In October, Blume Ventures promoted Ashish Fafadia to a partner status. He is tasked with overseeing overall financial functions and assist companies during the exit phase of Blume.

Fafadia joined Blume Ventures in 2012 and together with its founder helmed the structuring of investments at the firm. He also helmed the seamless exit of notable companies such as TaxiforSure and Mettl, which Mercer acquired.

Most of these appointments are in a bid to replace talents. For example, Sumit Jain joined Sistema from Kalaari after Sistema lost Kirill Kozhevnikov to RTP Global. Likewise, Sreedhar Prasad joins Kalaari after the VC firm lost three executives in a span of one year.

Source: https://www.business-standard.com/article/companies/private-equity-venture-capital-firms-strengthen-teams-after-losing-talent-118120500946_1.html

 

 

 

COCOON Capital Launches Tech Venture Capital for Southeast Asia

COCOON Capital, a Singapore-based venture capital firm that focuses on startups in Southeast Asia announced a new $20 million fund. The VC firm had first launched a $7 million fund in 2016.

The fund will primarily target enterprise-startups that focus in mid-tech, fintech, and deep tech. the founders, Michael Blakey, and Will Klippgen are well versed in startups and are household names in this sector.

The sole aim of establishing COCOON Capital is to ensure that startups in Southeast Asia get all the necessary support they need to get their businesses off the ground without much hassle.

“We are seeking immense potential in startups in the region with a young and tech-savvy pool that knows how to harness technology to solve real problems. The quality of ideas and possibilities have transcended the imaginable and Southeast Asia is proving itself to be on track to be leading commercial innovation destination,” said Blakey.

Klippgen further noted that the fund would target startups beyond Singapore. It would help startups in neighboring countries such as Indonesia, Vietnam and the Philippines. He said that they all have “tremendous potential.”

COCOON Capital pools it partners from USA, Europe, and Asia all who believe that they have to be fully active during the formative years of companies so as to unleash their full potential. The VC firm is to invest in a few companies per year so as to offer ample support to the chosen ones.

COCOON Capital portfolio already has 10 success stories is its inspection across the SEA region. Some of these companies include Sensor Flow and See-mode Technologies.

Source: https://www.digitalnewsasia.com/startups/cocoon-capital-launches-us20mil-tech-venture-fund-sea

 

Baiting Strategies by Founders for Venture Capitalists to Bite the Hook

Start-ups need to attract Venture Capitalists to invest in their business. However, it is not as straightforward as it sounds. The founders need to be purposeful as well as strategic to gain funding. The start-up product or service must also be highly marketable and able to generate notable amounts of revenue quickly to qualify for VC funds.

The service or product needs to be relevant in the industry. Investors will look at and most likely hire people that follow on-going trends to evaluate your business. Stay ahead by dealing with trending innovations. They can include next-generation industrialization, autonomous cars, genomics, home automation, and insurance on demand as well any captivating product you innovate.

Venture Capitalists have interest in firms that hold a promise to higher yields in the market. Most VC’s settle for a revenue probable of 100 million dollars within about five years. Lesser possible opportunities are unlikely to get funded. Competitors should be of little worry since VC’s are yet to settle on a leader during the proposal phase.

Create something unique about your business and investors will look your way. Venture capitalists base their investment on specific attributes that could generate notable returns for the firm. Some of these attributes can be a distinguishable user interface, methods of capturing data and the underlying algorithms.

A record of success in launching a business will give you an upper hand with investors. The personality, knowledge, and enthusiasm of the founder can also make VC’s interested in your start-up. If one lack such skills then the educational background, technological experience, reliable data, and a quality advisory board can come in handy.

 

References

https://www.entrepreneur.com/article/322550

 

Independence Can Overrule Dependence over Venture Capitals

Venture Capital funds are vital to the foundation and growth of start-ups and entrepreneur. Many companies have grown based on the aids of VC however, as an entrepreneur one cannot always rely on the funds. There are possible advantages to venturing solo in the market, but one must be sure that the benefits of being solo should outweigh the aid of VC.

One central element is ownership and control in which sponsors do not have to dictate how to handle your company. Most organizations are under tremendous pressure from investors to grow and achieve according to the revised projections. Failure to meet the desired demands can lead to a liquidity event where you may need to sell the firm in three to six years.

VC will grant you a massive amount of capital that will fuel your company; however, it takes away a considerable part of your independence. An independent founder will access funds through credit, loans from family and friends as well as savings. VC founded start-ups have the pressure of ‘go big or go home’ unlike doing it solo in which you are solely responsible for downfalls and success.

Owning all the shares in your company will give you leverage over the management.  Should you feel content with a certain amount of wealth, then you can lay low on the aggression of the company and work casually. You can decide on the terms of selling the firm or whether you prefer to make it a lifestyle. Should the entrepreneur opt for a lifestyle business approach, then they can hand it over to their children.

 

References

https://www.entrepreneur.com/article/322417