Understanding Venture Capital
Whilst we look forward to receiving your investment application, there are some key aspects of the nature of venture capital that we feel is important for us to make clear from the start.
- Only high growth proposals attract venture capital funding
To achieve a commercial return on our portfolio of investments we must invest only in those businesses that we feel have the growth potential and management teams capable of achieving that growth. In common with other venture capital investors, we expect to consider up to 100 business proposals for every 5 we invest in. - Decisions are very often based on subjective judgements
Our policy of investing in businesses in the earlier stages of development means that most of the companies we see have yet to prove their ability to generate substantial sales and profits. Therefore in making our investment decisions we will always be relying heavily on our assessment of future performance: an essentially subjective process. This means that if we feel we have to say "no" to your proposal, our decision will very likely be based on our subjective opinion about future performance. - Capital growth is the investor's primary objective
Finally, most venture capital investors are looking to buy and sell their shares within a 3 to 5 year period to realise the capital growth in their investment. Whilst on some occasions this sale or "exit" - maybe by way of a stock market flotation or through selling their shares back to the management, by far the majority of exits are achieved through the sale of the company to a larger acquirer - a "trade sale". - Further information about raising venture capital
If you require further information about venture capital we suggest that you visit the British Venture Capital Association (BVCA) website and refer to their publication, "A Guide to Venture Capital".
If you are eligible and you can answer "yes" to most of the above, then send in your business plan as your application. For guidance on preparing your business plan, click here.