A Reality Check For Venture Capital Seekers

Venture Capital. It comes in many shapes, forms, possibilities ... But shares of common characteristic: the risk taken,. In my profession, I run against many "fire-in-the-belly" entrepreneurs who are really a fantastic idea or business plan. Unfortunately, they lack the necessary capital to implement its business plan and / or ideas into reality.

Every month, over 100 projects at least my desk, if the borrower looking for a joint-venture partners and venture capital.Unfortunately, only one or two of those get funded. One of the reasons is the market itself: the banks are not lending is not the secondary market so far .... So all that remains is, is money from private equity ... especially if you financed 100%.

Let's talk about the transactions that actually DO ... GET FUNDED These are projects that require a high degree of predictability. To buy a power plant with a contract on their product for 25 years, for example. A casino in the Bahamasthat a 180% internal rate of return ... In short, these are all projects that are profitable as expected, and also to the investors (joint venture) partners or venture capitalists a big return on their investment. Other major projects are projects, which are patented or proprietary information or technology.

While 20% IRR (internal rate of return) is respectable, it is simply not attractive for venture capitalists who can 7 times as much for another project in a shorterAmount of time. In short, if you talk with venture capitalists, they are about one thing: how much money they may be modified by the investment in your project done. Keep in mind, and you will be able to talk to them in their native language.

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