Essay
Objective: Examine and describe the process for raising capital and understanding Venture Capital funding.
Introduction: A working knowledge of venture capital funding sources can be an effective strategy for a new or existing business. The VC market in the U.S is perhaps more accessible now then ever before for startups, due to our change in technology and the rise in incubators and angel investor networks. Venture capitalist are spread throughout the spectrum of industries to work with early stage business to provide seed funding to the established business for expansion and growth. The SBA is a valuable source in providing a number of financial assistance options and programs designed to meet key financial needs. This project will allow you to explore the lending programs and examine the critical factors required to streamline a small business for funding.
Deliverables: 3-page paper
Activity Details:
Step 1: Listen to the following video with Bill Reichert on Venture Capitalists and Top 10 Lies VCs Tell Entrepreneurs and use what you have learned about funding options and the role of the SBA in bridging VC funding sources and application processes in assisting small business owners for VC funding. Summarize your responses in a 3-page paper (APA formatting required):
SBA Video:
https://youtu.be/ReE44CymfF4
Step 2: Review the SBA website and examine the funding strategies provided by the Small Business Advocate: Small Business Advocate as a start to begin gathering your knowledge about current funding options and the VC programs available for small businesses. Identify the most appropriate program for the case study below. Consider all factors, strategies and criteria relevant to preparing an effective VC funding package or preparing a loan program.
Case Study: As an entrepreneur seeking a second round of funding for your company, how does venture capital differ from traditional financing sources; what is the difference between equity capital and venture capital; what is its relationship to investors; and what do angel and venture capitalists seek from a new business they are investing in? Discuss the options and alternatives an entrepreneur may take to secure capitalization for his company.
Step 3: Write a paper.