What is Venture Capital?
Venture Capital is a type of private equity capital typically provided by professional, or institutionally backed investors to businesses. It normally takes the form of cash made in exchange for shares in the investee company.
Whilst the VC’s operate in a similar way to private investors, they will only consider larger sized investments. Venture Capital houses are usually inundated with enquiries and tend to take a long time to conclude their transactions. There are, however, a handful of funds that will seriously consider recovery investments and can act quickly, although again it should be stressed that these funds principally exist for larger transactions normally requiring £1 million upwards.
How much money can be injected by means of Venture Capital?
Most Venture Capital funds prefer to invest in projects in excess of £1 million and only a handful will consider capital investment for recovery situations.
Does my business qualify for Venture Capital investment?
Venture Capital funds are usually most interested in ventures with exceptionally high growth potential. This is due to the fact that only such opportunities are likely to be capable of providing the financial returns and successful exit event within the required timeframe (typically 3-7 years) that venture capitalists expect.
Venture Capital houses are usually inundated with enquiries. If a company has a solid business plan, a good management team, investment and passion from the founders and a good potential to exit the investment before the end of their funding cycle and target minimum returns in excess of 40% per year it will find it easier to raise venture capital.
What is the next step?
Venture Capital funds tend to take a long time to conclude their transactions. There are, however, a handful of funds that will seriously consider recovery investments and can act quickly.
Beer & Young have good contacts throughout the private equity market place, particularly with those funds who specialise in recovery situations.