Most entrepreneurs dream of being able to raise Venture Capital financing (VC financing). It has become a measure of a business’s potential for growth and success. To some, getting tapped for VC financing is like winning the lottery. In its most basic form, VC financing is an investment of capital (typically cash) in an early-stage business with significant growth potential. In other words, VCs place bets on companies that they believe will generate big returns in the future, either when sold to another company or when they are catapulted into the stock market by way of an initial public offering (IPO).
However, the bitter reality is that VC financing is as alluring as it is
unattainable for 99.99% of small businesses. According to a study
conducted by the National
Venture Capital Association and Price
Waterhouse Coopers, venture capitalists invested $17.7 billion in
2,795 deals in 2009. So out of 23
million businesses in the United States, 0.01% received VC
financing in 2009. Granted these numbers don’t necessarily include all
of the businesses that have received VC financing in the past. But, the fact remains, the lion’s share of entrepreneurs will never be
in a position to secure venture capital investments.
To read the full, original article click on this link: New Equity Hot Tips Series — Who needs Venture Capital when there’s Community Capital?
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