WHO IS A VENTURE CAPITALIST?
Venture capital firm basically provides finance to all those corporates which are in the state of infancy and who can have a great future if they are funded. Technologically advanced companies are the ones whom VC aims at.
HOW DOES IT FUND?
A Venture capital firm has a range of employees from 2-40. Funding process is a cycle when funding is done through a VC. VC funds the new corporates and in turn they get the same money from the limited partners. Now who are these limited partners? Limited partners are the High net worth individuals, who want to invest their excess funds in to the portfolio of such newly established high potential firms. Investing in such companies is like walking on eggshells, however the return can be lucrative either. Limited partners wants to part with their funds and newly established firms need this funding and here comes in to the frame the role of venture capitalist firms. These limited partners give away their funds to the VC firms to invest in to portfolio of these new ventures instead of directly investing in to these start-ups. This is how VC gets funds to provide to new start-ups.
After amassing, a certain sum of money from the limited partners generally around $25million to $1 billion, the VC firm parcels out this fund to a portfolio of private companies. Some of the instances of VC backed corporates are APPLE and FEDEX.
PROFIT CHAIN
It is very important to understand how the margins are earned at various levels of a chain by different parties involved in a VC funding. As we know, a lucrative return is earned generally by VS firm for whatever fund it invests in to this new start-ups; now of whatever return they get from the investment 20 to 30 % is retained by the VC for itself and the remaining is passed on to the limited partners generally the HNI's.
Apart from this return, VC is also offered at times the stake in the company. VC is becoming all the more popular after the funding of OAK investment partners and New enterprise associates both broke $ 2.5 billion mark.
Since the VC's have vested interest in the success of this start-ups,partners will also at times sit with the board of directors, ofering advise and additional resources to help business grow. In case if there is a merger or acquisition or goes public, any windfall is divvied up between the company, the VC and the limited partners.
GENERAL INFORMATION
Many renowned VC firms are DRAPER FISHER JURVETSON,INTEL CAPITAL, US VENTURE PARTNERS etc. There are job openings for the positions of General partners, junior partners, VP or associate or analysts largely in any of the VC firms. The best way to enter any VC firm is through different projects and hitting the nail in the head in these projects.
Venture capital firm basically provides finance to all those corporates which are in the state of infancy and who can have a great future if they are funded. Technologically advanced companies are the ones whom VC aims at.
HOW DOES IT FUND?
A Venture capital firm has a range of employees from 2-40. Funding process is a cycle when funding is done through a VC. VC funds the new corporates and in turn they get the same money from the limited partners. Now who are these limited partners? Limited partners are the High net worth individuals, who want to invest their excess funds in to the portfolio of such newly established high potential firms. Investing in such companies is like walking on eggshells, however the return can be lucrative either. Limited partners wants to part with their funds and newly established firms need this funding and here comes in to the frame the role of venture capitalist firms. These limited partners give away their funds to the VC firms to invest in to portfolio of these new ventures instead of directly investing in to these start-ups. This is how VC gets funds to provide to new start-ups.
After amassing, a certain sum of money from the limited partners generally around $25million to $1 billion, the VC firm parcels out this fund to a portfolio of private companies. Some of the instances of VC backed corporates are APPLE and FEDEX.
PROFIT CHAIN
It is very important to understand how the margins are earned at various levels of a chain by different parties involved in a VC funding. As we know, a lucrative return is earned generally by VS firm for whatever fund it invests in to this new start-ups; now of whatever return they get from the investment 20 to 30 % is retained by the VC for itself and the remaining is passed on to the limited partners generally the HNI's.
Apart from this return, VC is also offered at times the stake in the company. VC is becoming all the more popular after the funding of OAK investment partners and New enterprise associates both broke $ 2.5 billion mark.
Since the VC's have vested interest in the success of this start-ups,partners will also at times sit with the board of directors, ofering advise and additional resources to help business grow. In case if there is a merger or acquisition or goes public, any windfall is divvied up between the company, the VC and the limited partners.
GENERAL INFORMATION
Many renowned VC firms are DRAPER FISHER JURVETSON,INTEL CAPITAL, US VENTURE PARTNERS etc. There are job openings for the positions of General partners, junior partners, VP or associate or analysts largely in any of the VC firms. The best way to enter any VC firm is through different projects and hitting the nail in the head in these projects.
