Venture Capital Financing Essay -- essays research papers fc

What is accident detonatorVenture capital of the United States is specie provided by professionals who invest alongside management in young, rapidly maturation companies that have the potential to develop into significant economic contributors (NVCA). Venture capital is an distinguished source of equity for start-up companies. These portfolio companies that receive venture capital ar thought to have excellent growth prospects. Start-up companies dont unremarkably have the access to capital markets because they are private. Venture capitalists are atomic number 53 solution to financing high risk, but potentially high return companies. Usually the investors receive a say in the companys management, they may be on the board, and they expect to receive returns 5-10 times their investment property of up to 50 million dollars (Burk). History of Venture smashingIt is important to start out with the history of venture capital to see how it has liberal as good as to show its up s and downs. It was thought to be unquestionable in the years following WWII but it can actually be dated all the way back to alliances in the Babylonian cipher (Gompers). These Babylonian partnerships used gold or silver to finance caravans. The legal injury for were 12 years and 100% profits (Heise). Much later the setoff venture capital firm was established in 1946. Karl Compton, the MIT President, along with Georges Doriot, a Harvard Business School Professor, formed American Research and Development (ARD). at that place were also local businesses leaders involved in the project. During the war, there were many another(prenominal) new technologies developed as well as other innovations from MIT. almost half of ARDs profits came from its investment in Digital Equipment bon ton in 1957. It had only invested $70,000 but had grown in value to $355 million.A decade later, many other venture capital firms were formed. They were all structured as publicly traded closed-end fun ds as were ARDs. Closed-end are mutual funds whose shares must be sold to other investors, instead of being deliver from the issuing firm. In 1958, the first venture capital limited partnership was formed, Draper, Gaither, and Anderson. Others soon followed suit, but limited partnership remained the minority during 1960s and 1970s. The sculptural relief were either closed-end funds, or small business investment companies. During these years, the total one-year venture funds were small and never exc... ...try. They are very bullish about the future of venture capital funding. They say this is due to the item that more investors are investing in venture capital, as well as the increase of IPOs (Raffa).Works CitedBartlett, Joseph. Fundamentals of Venture detonator. Rowman Publishers, 1999.Burk, James, and Richard Lehman. Financing Your Small Business. Sphinx Publishing,2004.Camp, Justin. Venture Capital Due Diligence. Wiley Inc, 2002.Gompers, Paul, and Joshua Lerner. Venture Cap ital Cycle. Cambridge The MIT Press,2000.Heise, John. The History of the Bronze Age in Mesopotamia. 1996.http//mahan.wonkwang.ac.kr/lecture/ancient/meso/sron/bronze_age.html bailiwick Venture Capital Association. 2005. http//nvca.org/Raffa, David. Pipe Dreams and Other Opportunities on the Venture Capital RoadAhead. 2004. www.catalyst-law.com/document/237Sherman, Andrew. Raising Capital. 2nd ed. Amacon, 2005Timmons, Jeffrey, et al. How to Raise Capital. McGraw-Hill Companies, 2004.Venture Capital Journal. Thomson Financial, 2005.http//www.venturecapitaljournal.net/vcj/topnews.html