Venture Capital involves the financing of start-up companies. These companies generally don't have the ability to source capital from traditional sources like banks or public markets as they are in the early stages of their life cycle and often generate negative cash-flows. So, rich individuals who can afford to take huge risks usually invest or rather fund such new business ventures.
Financial is provided during the following 3 stages:
1. Seed Stage - For research, assessment and development of an initial concept
2. Start-up Stage - To finance product development and initial marketing of the product
3. Expansion Stage - For the increase of production capacity, development of markets or products or enhancement of working capital.
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If you are a 'start-up,' your initial round of financing typically is from yourself, friends and family; a second round usually is from angel investors. Under most scenarios, venture capital firms will consider investing after the company has operations, generating revenues and seeks $1-million and more capital.
venture capital cocept and development in india
One example of venture capital is taking a $1M investment and selling half your company. The value the investment is $2M.
Venture Capital are funds made available for startup firms and small businesses with exceptional growth potential. Venture capital is also called seed money
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