Venture Capital & Business Growth Management
Table of Contents
This is a type of Business Growth Fund. It’s a fund involved in Venture Capital & Business Growth Management. We will explore here sources and types of venture capital and venture capital advantages and disadvantages. This topic comes under our publication tag ‘ BUSINESS TIPS‘. This is a label that give highlights on business information. For a comprehensive understanding of this topic visit our other write-ups on, how to nurture your business to growth, how to avoid business failure and the impact of Seed Capital in managing your start-up business.
This time around, we are to discuss the impact of venture capital and its management to grow your business. We are motivated by what we have observed as an ugly trend of business failure in Nigeria since the last four years. It’s our hope that what we have hear will help you to still hold on to your business and possibly enable you succeed.
Venture Capital & Business Growth Management
What is Venture Capital?
I wish to explain that venture capital is the second stage of capital introduction in your business, after the seed capital. It’s only those businesses that survive the first stage, using their seed capital properly, that graduate into introducing venture capital into their business.
Venture capital can therefore come from many sources. In this connection, venture capital can be said to be capital provided by firms who invest alongside management in young companies that re not quoted on the stock market. Their objective is to earn a high return on the investment.
Therefore, venture capital provides long-term, committed share capital, to help unquoted companies grow and succeed. Such lenders have a legal right to interest on the loan and repayment of the capital, irrespective of the success or failure of the business . In most cases venture capital is invested in exchange for an equity stake in the business.
Venture Capital & Business Growth Management
HOW TO GROW YOUR BUSINESS:
This is our only interest in this article. How to survive your business start-up stage by innovating your product or service, extending your market reach by diversifying your products or services using your seed capital. The second stage is the growth state. That’s where you need the venture capital.
Our previous articles on how to nurture & grow your business, tips to avoid business failure and issues on seed capital will help you reach this stage. We suggest you click appropriate links here now to read these articles together. Our interest is to help our esteemed reader business men and women to grow their businesses.
Venture Capital & Business Growth Management – Get it straight here:
Having known what venture capital is and why its need, can you go through these brain storming questions. They are meant to help you synthesize your operations and come out with some answers. They are also meant to raise challenges you would want us to solve for you.
- What does venture capital fund mean?
- Why would a business use venture capital?
- What are the purposes for which venture capital companies provide finance?
- What is venture capital advantages and disadvantages?
- Who are the top venture capital firms in Nigeria?
- What types of businesses obtain venture capital financing?
- What are the stages involved in venture capital financing?
How would the venture capitalist assess you?
The venture capitalist starts assessing you by evaluating your business plan. Most approaches to venture capitalists re rejected at this stage.
As a matter of fact, the principal aspect he considers is the commercial viability of product or service. Therefore the following questions come to play. – Does the company have potential for sustained growth? Does management have the ability to exploit this potential and control the company through the growth phases? Does the possible reward justify the risk? Does the potential financial return on the investment meet their investment criteria?
Furthermore, the venture capitalist gets into details by way of conducting due diligence.
Therefore, the venture capitalist will want to assess the technical and financial feasibility you presented in detail. External consultants may be used to assess market prospects and the technical feasibility of the propositions, if the venture capital firm hasn’t the appropriately qualified people in-house. Chartered accountants re often called on to do much of the due diligence. This may involve a comprehensive report on the financial projections and other financial aspects of the plan.
So you can see that the investment process, from reviewing the business plan to actually investing in a proposition, can take a venture capitalist anything from 3 to 6 months. There are always exceptions to the rule and deals can be done in extremely shorter time frames. Much depends on the quality of information provided and made available.
Venture Capital & Business Growth Management
Who are the Venture Capitalists in Nigeria?
When it come to how and where to get venture capital in Nigeria, think of GreenHouse Capital, SPARK Capital, Growth Capital Fund, LeadPath Nigeria, GreenTree Investment Company, Microtraction, Lagos Angel Network (LAN) and others.
MAKE A PERSONAL DECISION HERE:
Do you have any business challenges from this article? Do you have your business start-up timelines completed, registrations @ CAC, business plan and regulatory licences from CFMC Limited. It’s your personal decision. But we know as Chartered Accountants, Auditors, Taxation and Management/business development consultants, we could do so much for you.
Contact us through +234 8034347851 or email to [email protected].
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Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.
