Among the forms of financing for startups and companies already in business there are two that have particular characteristics: venture capital and private equity. These are two very different forms of investment which also have very different entities as their object. In fact we can say that venture capital is responsible for giving an important boost to the most interesting startups of the moment. On the other hand there is the objective of taking an interest in realities that have started, usually in a moment of difficulty. The end goal is however the same. Both venture capital and private equity are not business capital, but risk capital. This means that the aim is to buy and then resell later to achieve a profit.
Therefore the
considerations made prior to the Italy Phone Number List investment are in some ways essentially speculative. However, these are very useful forms of financing for both startups and already established companies. So let’s see what is meant by venture capital and private equity. Venture capital at the service of startups In fact. Venture capital funds are responsible for finding the most interesting startups looking for capital to start the business. We are therefore faced with a high-risk investment based on a project yet to be transformed into reality. We are often asked to explain based on which parameters. A venture capital intervenes to support a startup. The answer is not so simple.
Sometimes because
there is a well-crafted and credible New Zealand Phone Number List startup business plan behind it . In other cases there are temporary economic circumstances that favor the start-up of particular companies. A scalable startup Among the many variables, however, there is one that is certainly of vital importance. We are talking about scalability. A startup is scalable if it has the possibility, at least theoretical, to grow in a more or less indefinite way. If, however, it has objective growth limits (it cannot go above a certain level). Then it loses interest for this type of investor. Because the basis of venture capital intervention is aimed at acquiring company shares. We have said it and we repeat it, the objective is to resell in the medium term and make a profit. Therefore it is essential that the startup is scalable, so that the venture capital has an interesting prospect of profit on exit from the investment.