Articles tagged with: financing

Venture Capital: Alternative to Conventional Financing

For most entrepreneurs, “safety” and “certainty” are no longer part of their vocabulary. Entrepreneurs are visionaries and risk-takers who are willing to take a chance for the opportunity to achieve their dreams. The entrepreneurial spirit that makes individuals and companies go into business will only take them so far. Essential to the success of any business is the ability to raise money to grow. Venture capital companies provide new or established entrepreneurial companies with the financial safety net when conventional debt financing is not available.

Venture Capital Versus Debt Financing
Most startup companies or businesses in emerging markets do not have the collateral that banks and other conventional lending institutions require to secure the loan. Debt financing places a burden on the cash flow of a business by adding an additional monthly payment to a company’s bottom line. Many new companies quickly discover that some conventional lenders will not approve their applications because they are considered to be high-risk borrowers.

Venture capital companies generally do not require collateral. Venture capitalists are investors who provide money to entrepreneurial companies offering growth potential in exchange for an equity interest, usually in the form of shares in the company or a seat on the company’s board of directors and an active management role in the business. The high risk associated with venture capital is offset by the rate of return on investment that is higher than debt lenders receive.

Long-Term Role of Venture Capitalists
Investors that give money to companies in exchange for an equity interest in the business do so knowing that theirs is a long-term investment requiring them to be active in the operations of the company. Venture capital companies want to generate growth in the companies in which they are investing in order to maximize the rate of return on their investment. As equity owners, the investors benefit by helping management to generate higher profits than before.

Although capital investors are in it for the long term, the point of the investment is to maximize the rate of return while also having an exit strategy. Knowing when to dispose of the investment can be as important as picking the right company to invest in.

Making the Decision to Invest
Most venture capital firms require a business plan from a company asking for assistance. The business plan is usually reviewed to determine if it meets the investment goals of the venture capitalist. Some venture capital firms only invest in specific industries or in companies in geographic locations such as emerging global markets.

After reviewing the business plan, a venture capital investor will look at the management, products, history and financial statements of the target company. Once it is satisfied that the target company fulfills the criteria for investment established by the venture capital firm, an offer is made to the target company.

Source of Funds
Some venture capital companies invest their own money and retain the return on investment. Other companies have investors who rely on the venture capital company to find an appropriate company to invest in. The venture capital company shares in the profits along with the investors.

Improve Your Business with Accepting Credit Cards

The world of business is progressively increasing time to time. Many business owners always try to seek some new invention or improvement to make their business grow more professional from time to time. One of the ways to make their business gain more customers is by accepting credit cards as one of the payment methods valid for every purchase made upon your products or services. This way, their customers will find it convenient for shopping in your place. So, the first thing to consider is the convenience of your customers. The more they feel convenient when shopping in your place, the higher possibility they will make the next purchases in your place.

In addition to the increasing of the number of purchases, the acceptance of credit cards as one of the payment methods also gives a positive impact on the amount of money the customers would possibly spend in one purchase. That you accept credit cards has made them easy to purchase the stuff they want to buy without having to pay for the stuff at one time. People will likely purchase more items if they can take the items first and pay them later in some installment. For instance, they only have money for two clothes but then make up their mind for buying five due to the credit card financing.

As for the last benefit of the use of credit cards, it is that credit cards make it easier for you to accept the payment. Less cash will make the paying process simpler and shorter in the term of time. You can handle your customers’ payment faster and more convenient for sure. Even, the payment can be done using an application of Android or Apple named