Finance and the Small Business - Venture Capital and the Small Business
19 important questions on Finance and the Small Business - Venture Capital and the Small Business
Variety of funding sources to finance a new org. through stages of growth and development
- personal savings entrepreneur
- family & friends
- business angels
- venture capital
- government
Sources to finance a new org.
Venture Capital
- Financial intermediars that attract money from financial institutions (banks, pension funds)
- LE, wealthy families with specific investment focus
- Larger amounts then angels, and at later stage
With changes in capital requirements and sources of finance, there are 4 different stages a firm can grow through
- Seed stage: isn't founded yet, do not need a lot of money, depends on own money & friends
- Start-up stage: financial needs rises, risk invesment is high. Depends on 'love money', business angels and government
- Initial growth stage: business is growing, risk and uncertainty. No longer love money, solely business angels or venture capital
- Sustained growth stage: grow a lot, bigger invesment, so venture capital
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
For my 1st exam I got a C. Then, I started looking for ways to learn better and I came across Study Smart. Since then I have scored a A+, A, A- and another A. I highly recommend it to everyone who wants to hear it. I am so happy with it!!
I was struggling to finish all my first-year subjects for 3 years. Then I discovered Study Smart, which helped me to finish all of them within 3 months.
Because of StudySmart, things are going well in many ways. Before, I always had study stress and no time for anything. Now I feel calm and confident (because of the program). I used to score a B, now I usually score an A or A+.
Hey Chris, I really want to thank you very much for developing the platform, I usually got around C for my exams, now I scored an A+, an A and a A- !!
Since using Study Smart, my average has increased significantly. I even completed a statistics course with a A+ while I'm bad at statistics. I took on extra courses this year, because of Study Smart. Thanks so much!
Ever since I started studying with StudySmart I passed all my exams !!! No more re-sits!! At first, I was happy with a pass and now I only get good grades. Many thanks!
I aced all the courses I studied with Study Smart. For law, I first scored a D, and now an A! I’m 100% sure that I’ll pass all the courses I study with Study Smart.
I always thought I studied well. My grades were fine. I could never have imagined that applying these study skills would have such a huge and direct impact on my grades, my speed and the pleasure I have in learning.
For the first time, I finally feel totally confident about the way I learn. I have the perfect overview and make great progress in terms of speed and the grades I get. Thanks, Chris!
I immediately started to enjoy learning again, and my grades soared. All of a sudden, everything went better. I highly recommend Study Smart to all students..
Being able to create my materials online made the process of studying so much smoother and quicker. I no longer have to spend a huge amount of my time on creating my summaries.
At first, my notes were a mess. Now I use Study Smart to take my notes in a perfectly structured way. It helps me to save a lot of time and do other things I enjoy.
Students that study with Study Smart get better grades. The system applies all the learning methods in such a way that both well-performing students and students who struggle perform much better.
Hi Chris, I would like to thank you very much. Last year I scored C on a course, and this year I got an A+ thanks to your method! Thank you very much!
The largest effect is that my child is more enthusiastic about school! Every parent wants their children to be happy at school, Study Smart made it happen.
In high school, I failed several exams, and that has really changed now. I actually needed this tool very much back then. Since I started studying with StudySmart, I haven't had any D's. My average score is now an A and those are results I would have never had in the past
With my old method, I passed only 3 out of 8 courses. Since I started taking my notes digitally in Study Smart, I have passed all my courses on the first try. For me, StudySmart takes away the stress of wondering if I will pass or not.
Thanks to StudySmart, I passed all my exams, and with better grades than before! On top of that, I have mastered a very good study method now, which I am confident will help me earn my degree.
Investment process of business angels
Harvesting
- invest is big risk, some win some lose
- most are motivated by fun of investing
investment process of venture capital
Post-investment involvement
- VC use expertise & networks to make a variety of contributions to their investee companies
- help with suppliers, customers, establish tactics & strategy etc
Sources to finance a new org.
Government-backed investment organizations
- government created investment vhicles to fill gaps in supply of venture capital
- create investment funds under private management
sources to finance a new org.
Personal savings entrepreneur
- he shows he's financialy commited to org.
- other finance is hard to find in seed & start-up stage
Sources to finance a new org.
Business Angels
- High net-worth individuals, who invest own money directly in org.
- No family connection, but hope to gain financial
- play a hand on role in invested org.
investment process of venture capital
Deal structures
- Give investor control over key decissions
- Give investor involvement in org.
- Specify compensation for management
- Investor will use investment instruments, that give protection
Investment process of business angels
Post-investment involvement
- involvement differs per angel, some just a week, others years
- angel can have different roles, but mostly its advisory
Investment process of business angels
Deal evaluation (2 stages)
- Initial screening: angel decides if investment fits own personal criteria, wheter its worth time & money for second stage
- Detailed investigation: investor takes closer look at business (business plan, financial info etc), and decides if he wants to negotiate a deal
Sources to finance a new org.
Family & Friends
- biggest source for start up other then themselves
- mostly short-term, sometimes equity share
Profile Business angel
- Mostly male
- Having wealth
- experienced entrepreneur
Investment process of business angels
Deal originating
- First contact entrep. & angel.
- Contact can begin formal (via lawyer etc) or informal (one just approaches the other)
Investment process of business angels
Negotiating & contracting
- when decided to invest, angel must negotiate and contract
- three main issues: valuation and structuring of deal (share prize, time for exit etc), and conditions of investment
Investment process of business angels
- Deal origination
- deal evaluation
- negotiating & contracting
- post-investment involvement
- harvesting
Investment process of venture capital
- source of investment opportunities
- deal evaluation
- deal structures
- post-investment involvement
- harvesting
investment process of venture capital
Harvesting
- public offering in which share of VC are sold
- trade sale in which business is sold to other company
- private placement, purchasing VC share by another investor
investment process of venture capital
Deal evaluation
- likely as BA, but more thorough
- VS invest at later stage, less risks
- investment proposal concludes: concept, management and returning
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
