Business is the main block of success, wealth and fame for society today. If one has great business acumen, they can succeed easily in any kind of business they venture into. All it takes is one brilliant business idea to spark off a trail of success but many of these creative consumers lack the finances to kick start their business venture. Hence, it is important to seek out capital investors who are willing to fork the necessary money to propagate the business.
Sources of investors
There are many sources to capital investors who may assist in making an entrepreneur’s dream come true. Closer to home would be families and friends who have the money to lend if the entrepreneur does not have their own funds. These familiar sources can offer interest-free loans or be a minor investor in the business set up. Family members may choose to be directors in the business with a voice in its operation. There are many ways in which familiar sources can function as capital investors in the newly formed business.
Those who cannot borrow from familiar sources may seek a bank loan from banks or other financial institutions but the interest rate and loan conditions may be quite stringent especially if the business venture fails or does not take off as well as expected.
Venture capital firms
Another alternative of capital investors would be to seek the resources of an established and reputable venture capital firm for some equity funding. Business owners prefer securing equity funding from reputable venture capital firms as the funding conditions may be more attractive than that of a bank loan. However, one must meet the objectives of these capital investors as they are also focused on profits.
Venture capital firms are in the market to make money from those who have creative business ideas with no finances to materialize their business ideas. But these capital investors are not parting with their finances only; they are also co-owners of the business. They are not mere creditors waiting to collect their interest and paid up capital. They have a strong interest in the long term development of the business as capital investors.
Steps to take
The role of capital investors by venture capital firms is crucial; hence, it is important to seek the best venture capital firm to be appointed the preferred capital investors. There must be a solid business plan with attractive investments over a certain period of time that would entice the preferred capital firms to be capital investors to the business in mind.
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