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Rabu, 13 Februari 2019

The Advantages And Disadvantages Of Venture Capital

By Donna Scott


In the world of business, one must be keen and strategic in order to make their company successful. It usually takes huge gambles and efforts to expand it. Furthermore, it also needs good strategies, planning as well as enough financing. But no matter how unique and great your ideas are coming from your strategizing, you still need some resources to work on it. And it usually risks your budget to make it work that is why most would run to banks to have a capital. But in this era, there are many ways to gain some funds and one of that is through venture capital funding.

Truthfully, diving on this career is not that easy considering that you got lots of competitors out there who would surely not hesitate to tackle and beat you down. The path you walk might turn difficult, rocky and many twist and turn. Nonetheless, along the way, you surely will receive some lessons from it which could be put into application later on. Anyhow, it does require huge amount of time, money and effort to make anything work.

To make their company expand, entrepreneurs and businessmen will surely find ways to do it. After all, they need to achieve the goals they have set with their team. And to attain that, they really need some finance for their foundation.

For those who just started their own company, most of them would really rely on venture capital. Those capitalists will finance the business for an exchange of equity on the firm. In addition, here are also the boons and banes about it.

This can be a great advantage for those beginners. You got a new idea into your mind and want to sell it on the market. And to develop that into a product, you really need some finance. And this is how the venture capitalists help you.

Since you are lacking with that resource, you would need venture capitalists to provide you the funds. They will basically help you to expand your business since they also will gain benefit from it. It is a win-win situation for the both of you. Furthermore, you do not need to pay the funds that they offered.

However, since they gain equity, it just means one thing. They own your company as well. They will be the new owners of the business, therefore, they also have the right to give demands and suggestions on your work.

For others, this might be a difficult trade especially when there are disagreements between the owner and investors. After all, they are now considered as the new owners now that you deal with them. There might be loss of control due to their demands.

This might be an advantage or disadvantage on you. But if your product is totally worth it, then this might turn into your advantage. That is if ownership is not an issue to you.




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