Venture Capitalist


Venture Capitalist


  • Often is helpful for businesses who are high risk, and cannot achieve finance from other sources (e.g banks)
  • VC's can provide businesses with advice and contacts, as they often have a business expertise. They can help out with the business.
  • They can often be negotiated with, whereas with a bank, there would be not very much room to negotiate.
  • They recognize the need sometimes for delayed payments and they realise the difficulties with a start-up business.


  • They often demand a significant share of the business in return for their investment, for example, Levi roots had to give up 40% of his business for a return of 50,000.
  • In return for the high risk, VC's often want high interest payments, which potentially undermineds the future growth prospects.
  • They sometimes may exert too much influence onto the business, which means the owner could loose their independence and responsibilities.


VC's have both advantages and disadvantages. and it depends on the businesses options. If the business is in desperate need of finance which they cannot achieve in other places, VC is a good way to start-up finance, but you must be prepared to give up a proportion of your business/profits.
It is a long term source of finance generally, and the VC's do take risks, but it can provide excellent returns. 


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