A private body to provide funding for a start-up venture or budding business to overcome their financial needs and financial shortages for their operations, i.e, a funding body for budding/developing firms is known as VENTURE CAPITALIST.
Budding startups with latest and innovative ideas are being assisted by Venture Capitalists at their initial stages in exchange of equity & possession stake. Sprouting startups with risky operations are the eligible ones for this seed funding.
Who all are Venture capitalists:
rich depositors, investment banks and any other monetary organisations.
Why are Venture capitalists needed?
The capitalist providing money will in return acquire an equity position. This equity financing mainly happens where the business is not established and which can’t access business loans from financial bodies due to shortage of cash incomes, deficit of security e.t.c
The Controlling Authority:
The Venture capitalists will have an active participation in the business operations and thus a controlling power in such firms.In case of selling of shares or any such cases due to the well organised investment structure,the Venture Investors are eligible for rewards.There will be an individual who will be the board member and take part in all the key decision making and administrational & managerial operations and even funding & financing.Usually the managerial layout will be as a partnership firm,where each individual will have the responsibility and authority according to the equity share and receive the profit according to the equity share.
Do you need VENTURE CAPITALIST assistance? Let’s check the documents
- Details of unsecured loan, if any raised by the company.
- Moa, Aoa,Incorporation Certificate.
- Letter proving no past Venture Capitals have been utilised.
- Investor rights agreement,Voting agreement e.t.c.
- Prior Bank’s Inspection Report.
- Updated Term Loan account statements & Cash Credit account statements.
- Bank’s acknowledgement assuring that they will not absolve any primary or collateral security without the venture capitalist acknowledgement.
How to Apply ?
To register and request for a venture funding the primary procedures are:
1. Idea Generation & proposal preparation of the Business:The initial step is to submit your idea with a well prepared proposal including:
- Executive Business Summary
- Requirements for the management of the company.
- The financial and investment calculations.
- Current and future situations.
- Current and future situations.
- The market trends and scenarios and value of the idea in the market.
- Detailed analysis & decision making whether to provide funding, or not.
2. Initial Meeting:
After proposal submission, if the Investor is interested in the project and is ready to fund, then they conduct an initial meeting to discuss the project in detail. After this meeting the final decision to proceed or not will be made.
3. Deep Research-Due Diligence
Varying from business categories and business natures, due diligence fluctuates. The procedure is done after a series of client communications, operational questionnaire and analysis of goods & services methodologies.
4. Terms and conditions-Funding
If the due diligence is satisfactory then, the investor submits a letter “ term sheet” mentioning the terms and conditions of the investment. These should be acceptable and approved by both the parties, and after the legal procedures and due diligence the fund will be released.