A venture capital investor can be an ideal partner.
You have established a lively business but you need money to grow.
Your alternatives include raising private equity, floating on the stock market or on AIM or a placing of shares with private individuals or a venture capitalist. Each option has its own merits and you should consider them carefully.
Venture capital, however, has specific advantages:
Compared with raising capital by flotation, the backing of a single investor does not involve public disclosure of your books and plans to competitors.
The value of your shares will always depend on the specific circumstances of your business rather than on the ebb and flow of the market as a whole.
Rapidly growing companies often require several injections of capital.
The presence of a strong outside investor tends to make it easier to approach your bank for increased funding.
Venture capitalists examine your business very closely before investing, which provides the benefit of an independent strategic view.
A venture capital investor is likely to have a clear and uncomplicated objective - to make good returns on his money - while private individuals may have an alternative agenda such as creating employment for themselves.
Moreover, even the most experienced private investor will lack the experience of growing companies which is common among venture capitalists. Having a good partner can be exciting and rewarding - venture capital can provide such a partnership and help make your visions a reality.
If you have a question you would like one of our experts to address, write to: SME, 174 Hammersmith Road, London W6 7JP.