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Venture Capital is money invested in the share capital of a business to help it grow rapidly. Businesses that look for this sort of investment should be in a sector that has high growth prospects, may have barriers to entry from competitors have an ambitious management team in place and provide an opportunity for investors to sell their stake at a return acceptable to them.

If the answers to these questions are all positive, then the business may be a suitable candidate for Venture Capital.

The next step is for the business seeking investment to draw up a business plan covering the product of service that is sold, an overview of the market, the management team in place, an outline of the operations, the financial plan and finally how an investor would sell on their stake in the business.

Typically the return venture capitalists look for is high, reflecting the fact that if the business is not successful, they will lose their investment. For most private companies the level of return required are too high but for those in the right niches requiring an injection of capital, venture capital may be the solution.


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