What is venture capital? What are the advantages and disadvantages to a new or s

Question

What is venture capital? What are the advantages and disadvantages to a new or small firm of getting capital funding from a venture capital firm? What is venture capital? What are the advantages and disadvantages to a new or small firm of getting capital funding from a venture capital firm? What is venture capital? What are the advantages and disadvantages to a new or small firm of getting capital funding from a venture capital firm? What is venture capital? What are the advantages and disadvantages to a new or small firm of getting capital funding from a venture capital firm? What is venture capital? What are the advantages and disadvantages to a new or small firm of getting capital funding from a venture capital firm?

Explanation / Answer

Venture capital : This is a very important source of financing for a new business. Here money is provided by investors to start a business that has strong potentiality of high growth and profitability. The provider of venture capital also provides managerial andtechnical support. Venture capital is also known as risk capital.

Advantages of Venture Capital: The advantages of venture capital are as follows

i. New innovative projects are financed through venture capital which generally offers high profit­ability in long run.

ii. In addition to capital, venture capital provides valuable information, resources, technical assistance, etc., to make a business successful.

Disadvantages of Venture Capital: The disadvantages of venture capitalare:

i. It is an uncertain form of financing.

ii. Benefit from such financing can berealized in long run only.

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