June 27, 2012 by Beacon Exit Advisors Financing the Deal 0 comments
Venture Financing: The Hard Facts
Government financing and venture capital financing account for less than one percent of all new business financing. Sixty-seven percent of all small to mid-sized businesses are financed by personal savings or friends; thirty-three percent are financed by lending institutions. The facts about venture capital financing are especially cold and hard…
- Venture capital is limited to high-growth potential, high capital-absorbing businesses.
- Venture capital benefits as few as 1000 businesses a year, and then…
- The average investment is $2.3 million, divided between 3-4 venture capital funds, which take 40-50-60 percent or more of the business’s equity.
- Venture capital investors expect the business to grow to $25-50 million within 5 years–at which time the business will go public or be sold.