22 Nov 2019
Do you need Venture Capital funding for your startup?
In the first quarter of 2019, $75 billion was invested globally into venture capital backed startups. Traditionally technology has been linked to venture capitalists and we have seen several well-known technology companies that got created in the early 1990’s create tremendous value for venture capital firms. Today again we see several disruptive venture-backed unicorns drive the interest of entrepreneurs to raise startup funding for small businesses.
Venture Capital plays an important role in our capital markets. They create large multiple exits for their investors by investing in technology ahead of its time. Venture capitalists typically spot trends before the public and private markets and offer investors willing to take high risk bets, an opportunity to participate in early stage disruptive business models and technologies. An opportunity that they cannot avail in the public market. However, for an entrepreneur venture capital may or may not be the right source of capital. While there is an allure to get attractive valuations early on in your venture, the pressure to show aggressive growth once VC capital is raised is not a target every company can meet.
Investors for startup businesses or Venture Capitalists are not just capital providers, but are also important stakeholders in the business. So just as you think through the people you want associated with your company, you also want to think about what type of investor you want invested in your company. Today you have several different types of investors in the private markets from high net worth individuals, corporates, family offices among many others offering both equity and debt. And each of these investors offer different benefits.
So, as you think about raising funds make sure you have the right investor partner with you along the way. As having the right investor partner can make all the difference in the direction your company takes after the funds are raised. After all building a company is a marathon and not a sprint, so you want to make sure you build the best team of partners to support you along the way.