Page 14 - BrewDog Venture Capital

How does Venture Capital work?

Venture capital offers funding to start-ups that are growing

quickly in exchange for equity.

Pros Cons

Substantial finance resource Reduced ownership and control
Aids risk management Board of directors established
no monthly repayments Oversight required
no personal collateral called on

expertise and contacts supplied

These fast-growing start-up firms wishing to quickly scale up

their business may find that venture capital is the only viable

financing option open to them.

Typically, venture capital firms source the majority of their

funding from large investment institutions who expect high

returns on their investments.

Consequently, venture capitalists invest in companies with

high potential in terms of growth and returns and with the

prospect that they are able to exit through either an IPO or a

merger/acquisition.

The venture capitalist adds value to the company by active

participation and taking board positions.