Page 12 - ITI VC Guide V10

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Equity Funding Guide
sector your business operates in, the presence of other investors and where the business is in its development cycle) and Corporate Venturers. Corporate Venturers can be product related or service companies that provide funds and/or
a partnering relationship between mature and early stage companies which may operate in the same industry sector.
This Guide’s principal focus is upon Venture Capital Funds and Business Angels. The guide will benefit entrepreneurs and their advisers looking for venture capital from both these sources. In short, the aim is to help you understand what Venture Capital Funds are looking for in a potential business investment and how to approach them.
What is Venture Capital?
Venture Capital; provides long-term, committed share capital, to help unquoted companies grow and succeed. If you are looking to start up, expand, buy into a business, buy out a division of your parent company, turnaround or revitalise a company, Venture Capital could help.
Obtaining venture capital is very different from raising debt or a loan from a lender, such as a bank. Lenders, who usually seek security such as a charge over the assets of the company, will charge interest on a loan and seek repayment of the capital. Venture Capital is invested in exchange for a stake in your company and,
as shareholders, the investors’ returns are dependent on the growth and profitability of your business.
The investment is unsecured, fully at risk and usually does not have defined repayment terms. It is this flexibility which makes Venture Capital