is there really such thing as a venture capitalist?

Question

IF so, how does one contact and benefit from one?

Answer 1

All a venture Capitalist is - A person that has the money to fund an entrepenaur's business idea. Many local restaurants were funded by venture capitalist Think of a great chef that needs money to start a restaurant. VC pick up where banks leave off. Banks won't lend much money to restaurant start-ups because the high failure rate and lack of collateral. Food, Advertising, and Decoratives are not collateral. So, VC will provide the money and will serve as a part owner. The agree ment can vary. A VC can be anybody you know that has money and you can convince to go in with you. "Your Rich Uncle" More standard VC that focus on start-ups usually require that 100% of the profits go back to pay back their investment, then after that they receive maybe 20-25% of the profits going forward. The big VC firms cater to businesses that need large amounts of investment. They help firms get to the level where they are big enough to go public. Investment bankers from UBS Goldman or Morgan Stanley, etc provide capital in return for a % stake in the business. Then they create common stock distribute it to all the owners including themselves for their share of ownership. Example, 100 shares may be created, at $10. The firm may needs $900 so they keep 10 shares for themselves. Then they may pay back the original VC in cash or give him shares. Morgan Stanley then takes their 90 shares and offer them to the public at $15 to pay back the capital they invested to the firm and earn their return. So VCs provide funds before companies are ready and able to go public. Then Investment Bankers serve as the agent in taking a company public. Usually this happens quickly, as they are focused on the spread between what they buy their stake for and what price they sell it for in the market. Private Equity Departments of the Brokerage firms do VC services. They create mutual funds out of ownership interest in start-ups -with huge min investment requirements to the public. Usually there is also a 4-5 year min holding period. During this time, the Private-Equity Bankers coach the management. After several years when the start-up can go public, the investment banking underwriters step in and create common stock allowing the privat shares to convert to public shares.

Answer 2

Absolutely. Their are some very large groups such as KKR and Blackstone that you may have heard of. They tend to raise funds in the $ Billions. At the other end of the scale you will also find "business angels", usually self-made millonaires who have started their own businesses just like you and are willing to invest small sums to help new businesses off the ground. Most large cities will have some form of business angel network.

Answer 3

Venture capitalists are real. A friend works for a company which finances restaurants. They will loan money to virtually anyone. The catch is 100% interest rate.

Venture capitalist or loan shark?

ToMAYto or toMAHto?

Answer 4

Financing for new businesses. In other words, money provided by investors to startup firms and small businesses with perceived, long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.

Answer 5

There are all levels of Venture Capitalist out there. Depending on the amount needed and the industy you are in. Some industries are hotter than others (Bio-Tech, Nano-Thech are hottest now).

Answer 6

1) Yes
2) I am right here.

Top 5 Answerer in this castegory.

Answer 7

yes. Look in the YP.