Venture Capital

What is Venture Capital?

Venture Capital comes from angel investors and venture capital firms.  Angel investors often provide their own capital to finance a business for equity in the business in exchange.  Venture Capital firms are specialists in funding startups and new ventures with the goal of a return on the investment.

Venture Capital is usually for these scenarios:

  • Startup Businesses 
  • Entrepreneurs
  • Alternative to bank loans

Who needs Venture Capital?

Any business owner or entrepreneur may seek Venture Capital, however, it is best for those businesses who do not have access to other lending. 

What are the funding stages?

Venture capital typically involves the following funding stages:

  • Seed Stage - First stage is often used to prove the idea is valid and profitable.  Investments are generally modest because of the early stage.
  • Startup - Stage that covers product research, marketing, and development of products.
  • Growth - This is usually when a venture capitalist will enter the business picture to give capital to expand on sales and manufacturing.
  • Series B - This round is used usually for companies that are running but not yet turning a profit.
  • Expansion - In this round, a profitable startup can seek additional capital to expand the business.
  • Exit - The venture capitalist sells their stake in the company to reap their planned return on investment.
  • Bridge financing - Type of financing used to acquire capital between rounds of Venture Capital after exits of investors.  Lioness Enterprises, LLC can assist with location of this kind of financing.

Why is Venture Capital so popular?

The main reason is the lending requirements are different and the excitement that can come from investors seeing your dream.  A Venture Capitalist takes upon significant risk when funding a startup because there is no company history.  

Is Venture Capital always a good option?

When you accept Venture Capital, you are releasing partial equity in your company to an investor, which gives them the ability to set terms.  Many entrepreneurs may not find this type of relationship dynamic appealing - see the website to see what other entrepreneurs have to say about their experience.

How do I apply for Venture Capital?

Lioness Enterprises, LLC can connect you with private investors through our many different partnerships that allow us access.  We will advise you to keep your business equity before giving it up to a private investor by considering other lending options for your scenario first.