October 14, 2010
Choosing between venture capital and private equity for your venture can be a tough choice. Knowing when it is time to consider this option and how to behave when you have reached the decision it is very important.
It doesnâ€™t have to be hard. There are some basic things you have to know. For example: most of the companies who are considering private investors are rather low on equity.
Do you need money to expand or start your business? No worries. There are many sources of equity capital that you can collect: Angel Investors, friends and family, venture capital, strategic or corporate investors, private equity firms and others.
Where you go for the money depends a lot on the funding stage your company is in. The first one is the pre-seed funding stage usually before constructing the enterprise. This is the stage when you look for available capital resources at your friends and family. The next stage is the seed funding stage, which some companies may skip. This is the stage when the company is not open yet. At this stage, you are usually going to look for financing at Angel Investors especially if you need less than $500000. If you need more you may look for venture capital companies as about 15% of them invest in this stage also.
Now the next two stages are the most interesting ones. The first one is the early stage funding and this is when it is time to look for serious venture capital sources and when you need a really good database of investors like we offer you. It means you are on the way to launching or even expanding the business and you need a massive infusion of capital.
If your business is growing and successful and you are gazing at new markets, you want to reach, you are probably in the later stage funding and many venture capital companies will be interested. You just have to find the right ones. This is when you need investments that are over $5-10 million.
Actually looking back at these stages, you can conclude that venture capital can be pursued just about in any stage besides the pre-seed funding stage where you can still be lucky and find an Angel Investor.
Take a moment to determine exactly how much money you need and in what is the funding stage your company fits into you will know what to look for. The next crucial step is to find the investors who are interested in ventures like yours. For that, you need a list of founding sources. Go here to download a Free Trial of a huge database of Angel Investors and verified Venture Capital source and create a custom list with the investors interested in your funding stage.
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