The concept of venture capital and more (1)

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The concept of venture capital and more
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Venture capital
Venture capital is what is needed for a business
to kick start. It is also needed in times when
the business wants to expand itself. The funds
that are put into venture capital either come
from the already owned assets by the business or
invested by investors or done with the help of
loans from banks. Venture capital is required in
projects that bear a substantial amount of risk.
The major portion of money of venture capital
comes through wealthy investors who want to see
their money grow in the long run.
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Making the ground decisions
If a business owner has a vision to expand in
some years, then they may look at building up
their asset base strongly. This means that
investing in longer mutual funds, long short
funds in India, property, etc. can real fare well
for the business if planned correctly. For this
reason, it is necessary that the business hires
an external source of financial advisory. It
could be an asset management firm or a wealth
management company, depending upon their needs.
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What a financial advisory does
When you hire a wealth management company or an
asset management company, the manager who your
profile is assigned to does a careful study of
your present financial portfolio and then they
device a plan to help your business grow in the
direction you want it to. It makes the business
self-reliant and sufficient so that in near
future, they do not really have to depend on
banks or heavy investors to grow their business.
Although it is important to remember that this
process takes a fair amount of time.
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How is it different from investment banking?
It is important to note that asset management is
a very different concept that investment banking.
Investment banking mostly deals in raising
capital for a business but at a very high cost.
Plus, asset management, as pointed out earlier is
a process that takes a sufficient amount of time
before it starts to show results. Investment
banking on the other hand is very demanding and
requires swift actions as well. the final
decision could either get huge gains or loss for
the business.
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Types of venture capital
There are different types of ventures capital
that your professional financial advisor may
explain to you. There is seed capital that is
generally for business starting out new with no
products to show. Start up capital is where you
have a sample product ready and need money to
produce more as a business. As you proceed, there
is early stage capital, expansion capital, late
stage capital and bridge financing.
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Thank You
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