Tuesday, July 5, 2011

Seed Venture Capital Guide

By Kate Bass


Companies who give an effort to save the on going problems involving global concerns are typically, the nature of these companies.The concept behind the name is that funding at the stating phase is like a seed that is about to develop. Before a venture starts to receive income, the product or service offered would need extensive studies thus needing a minimal amount only. The seed fund is needed until the company starts to make money and be noticeable to capitalists. As they say, high risk investments also possess high returns, one example of which is a seed venture capital.

Banks are very meticulous in choosing where to invest their money and would give the new company a hard time. Business men that are willing to put in money to the business is also an option for the business owners. They are known as such because they often invest in risky, unproven business ventures for which bank loans and formal venture capital companies are not providing. Banks and SBA credit loans typically require that a business should be in operation for at least two to three years, completed and audited financials, revenues, profits, high cash reserves; high personal net worth of the executives, personal guarantees, etc.

Today, many companies have been created to bridge gaps and offer both risk capital and business advisory services to small-to-medium scale entities in ecotourism, sustainable agriculture, aquaculture, sustainable forestry and non-timber forest products.A typical Angel investor has high net-worth assets and has interest and knowledge in a particular business sector, often the industry he or she gained personal affluence. Some are successful business owners looking to invest in new businesses to expand their investing careers. A report that would state the pros and cons of the business venture financially speaking is supplied to the investors. The product model is shown to the investors at some instances.

Typically, the investors would have a share to the company's income as well as responsibilities if he would put in money to the business. In order to protect the idea or the product that is being presented to the investors, a contract would be accomplished by the business owners before it is shown to them.

A new start up company that has vision of manufacturing a green product line will usually prepare a Feasibility Study along with the business structure and outline of the company.Unlike Seed Venture Capital which does not necessarily involve a large amount of money. A typical venture capital could get a huge sum of support from investors in contrast to seed venture capital who has not yet gained any reputation from the industry.




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