Monday, May 28, 2012

Venture Capital Needs a Practical Business Plan

When making a proposal for venture capital always use reasonable numbers in your proposed Business Plan. At the same time, you must show that your business is scalable. That business can become big enough to attract enough attention.

Venture capitalists make money by eventually selling their equity interest to the public on a large scale. They think in terms of hundreds of millions in potential profits. Your business therefore has to grow fast in just a few years, in order to be an interesting investment for them.

There has to also be what venture capitalists call an ”exit strategy.” When that eventual public underwriting or IPO, or a sale to a large corporation can take place. (See the Earl J. Weinreb NewsHole® comments.)

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