Capital and finance is the lifeline of business which is generated through equity, borrowing or debt. The flip side of the same business where the investor comes into the picture is another big animal. As a Venture Capitalist (VC) securing the fund and investing it in an established business is one stream and catching an Early bird would be an adventures venture. As a Venture Capitalist, one would look for certain factors which would not only secure his money but multiply their investments too.
The promoter’s history and business historic graphs and futurist scopes are well analyzed. Honest and Reliable team with potential long-term relationship makes a venture work well and achieve desired goals. Qualified and proven knowledge should be a built-in quality of the promoter and its team and should have the ability to expand and take its level higher by building upon strong foundation grounds.
The idea for business has to be well structured and have an innovative aspect to it. VC pitches for a business with an extensively researched analysis. To get into an established business they venture in a particular sector which can be considered as specialty investment e.g.: Sun jewels are launching a particular sector for only precious gems and jewelry then that particular sector will need sources for finance, here VC investor plays an important role. After analyzing the products market survey and secondary survey, demand for the specific sector, products or services they take a decision to invest and make a stringent written agreement which covers all the clauses and future commitments by both.
Re-investment of profit money to make their capital size big and to gain multiple times from their investments is the main essence of VCs. Withdrawing the returns from investments at regular intervals like Dividend payouts which the investor receives a small portion of the annual profits VCs re-infuses the profits into the working capital make big numbers. They are the long-term players in the industry.
None of the business develops overnight; it will need its own teething time and go through every the process of establishment. Indeed the final outlook of VC would highly depend on the profitability of the business and financial upward statistic of the business. Rotation of money and putting more into the project which that derive maximum profit. Its unique strategy is to revive from a successful project and re-invest.