Stories about incredible stories of success cause each of us constant interest. People are rich in months. And they become not just secured, but firodally rich. It is unlikely that there is a person in Russia who has never heard about Google, Aliexpress or Apple. Not so long ago, it was only the ideas of creative people who walked up with the times. Not all are able to create innovations, but almost everyone can invest money in them to earn no less than the author's idea! Today it will be about venture investment!
Creative people with great potential often do not have money for the incarnation of their ideas into life, so they attract those who are ready to finance them with all their might. For this investor receives a share in the new business and reaps the laurels on a par with the developer. It is worth understanding that we account for not only success, but also failures in the event of a negative development of events. This is called investment risks!
What is hiding behind this concept of Venture Investments? The name speaks for itself! Venture is translated as a "risky enterprise". Investments - investment of funds in order to obtain income. As a result, it turns out: the risky investment of capital in innovative projects and business ideas, in order to obtain a profit, which, if good luck, exceeds income from any other type of investment.
As practice shows, losses from several unsuccessful startups with interest are covered with one successful! Therefore, there is a concept of a "venture investor" - this is a person who finances exclusively risky innovative enterprises. Those who do not understand the meaning of the term "startup", we recommend the article.
Venture Investments is usually associated with innovative ideas, since only they can give a truly high income, which sometimes reaches 1000% of the invested funds. Other business ideas can also fire their place under the sun, but they will not give so high yield. Profit from investment will be average in the industry, even subject to incomplete or weak market saturation. Only a new idea that answers the challenges of modernity can "blow up" and bring great success to the creators. In the last decade, the most profitable startups relate to the spheres of IT, medicine and high technologies.
Risk investments have a number of characteristic features. Some of them are strong parties, others on the contrary - weak.
The benefit for the novice starter is obvious: the required amount will be allocated for the project, which he himself is simply not available in 90% of cases. At the same time, he remains the author (ideological inspirer) and gets most of the profit, often without putting a penny! For an investor, the benefit is that invested in a venture project, he receives a lot in a very promising business. Please note that finallying the case is 100%, it is rare to get more than 50% of the company! In the startups, the idea is valued above the funds for its implementation. Nevertheless, it is still profitable! 2
Often, investments are needed at the "grinding" stage of ideas. When there are only planned calculations of future financial indicators. This is perhaps one of the weaknesses. The planned indicators of profitability are an extremely unreliable indicator. Approximate it to reality is impossible due to the fact that the business just begins. There are no reports and data over past periods, on the basis of which it would be possible to make an accurate forecast for the future. Be very attentive when choosing an object for investment, because there are a lot of fraudsters among startarters, which will provide a colorful and very convincing business plan, and then disappear in an unknown direction with your money!
If it does not ignore the case, then the money will lose only the one who invests them. The starter is not obliged to refund, since the degree of risk was known in advance. The depositor provided funds for the implementation of the idea voluntarily, having no guarantees. Of course, it happens that money is provided in the form of a loan on a return basis, but this is a rarity.
No other type of investment will bring such income as an investment in a successful venture project! One good luck can be more than overlapping the expense of nine previous failures! For example, Google Inc appeared in 1998, thanks to investments in the amount of $ 100,000. After 6 years in 2004, its creators became billionaires!
The fact is that startarters do not always have experienced entrepreneurs, so the contributor's assistance will be eagerly. Their relationships often go beyond formal and they are working together for the success of the case! Especially successfully, if the investor has the necessary knowledge and experience in entrepreneurial activities. He can take on all formalities, and the author of the project will be able to continue to develop the basic idea.
In a venture project, the author and the depositor do not compete with each other for the seizure of the main share of business (a controlling stake in shares), they work for achieving a common goal - profit. All relations between them are enshrined in the contract. For the capital owner, the startup is, first of all, an object of investment, and already on its own business! Therefore, the achievement of high yield is the main goal, personal ambitions are departed into the background. The unity of the creators always has the best affects the development of the case!
Venture investments are also distinguished by the fact that it is impossible to predict when the profit will be received. Business can develop very rapidly and after a year the distribution of income between the authors and depositors will begin, and sometimes you have to wait for several years. Usually venture firms legally declared in the form of LLC or joint-stock companies, which makes it easy to attract additional capital and redistribute earned funds. Even if the idea immediately got a good response, the first profit is usually not distributed, because the enterprise capitalizes in its account. That is, income reinforced and is spent on the expansion and needs of activity. When the business ceases to need a permanent additional influx of capital and will be in stability, then the payment of dividends to shareholders will begin.
Fact 1. The world leader in the financing of venture projects, of course, are the United States of America. The volume of this market segment is about 20-30 billion dollars annually. This situation has developed due to a serious legislative framework that protects investments.
Fact 2. No other country of the world approached this indicator. If you fold the volume of venture investments of countries such as Hong Kong, United Kingdom, Australia, Israel, it will not work 15 billion dollars.
Fact 3. Assess the actual amount of financing of venture projects of the Russian Federation is not possible. The reason for this is a strong relationship with offshore investment accounts.
Fact 4. The most profitable venture idea at the moment is Alibaba. His founder is a Chinese teacher who has created a mediator's company between sellers and buyers. It is impossible not to notice its similarity with such projects as eBay or Amazon, but there are fundamental differences. For example, all Chinese production products, the price of them is fixed and there is no auction. At the first stage, investors of the ideological inspirer Jack Ma made his friends who did not have to regret their decision. The volume of investments amounted to only $ 60,000. For comparison in 2015, profits amounted to $ 77 billion, which at times exceeds the income from American analogues.
Fact 5. On the heels of the Chinese, the Americans are coming. Rather, American Mark Zuckerberg with his grand child - Facebook. Venture firms have one very important indicator, which is called primary public placement, that is, the output of shares in free access to the stock exchange. Most often in the media there is English abbreviation - IPO. The most important parameter is the company's cost at this moment. After some time, analysts estimate its current value. The difference determines the success of a venture enterprise. Facebook at the time of the IPO was estimated at 16 billion dollars. After a short period of time, the company's cost was already 104 billion dollars.
Fact 6. The leader of the segment in Russia is the project of Yandex. The only venture company that went to the IPO. Prior to that, the company was estimated at $ 8 billion, after - only 9.8 billion dollars.
All who are engaged in investing venture projects can be divided into five large groups:
We are talking about a private person who is ready to invest in the case, which he seems promising. An important point is that it is only a profitable business idea for him and nothing more. It does not interest him in which field will function a venture company, the main availability of a convincing business plan will function. Money that invests should be called venture capital. An attachment into a promising business can be both sole and cover only part of the amount required. In essence, each of us, having decided to try herself risk investment becomes a venture investor. It is important not to confuse VI with business angels, about the essence of which and the distinctive features will be talked below.
This is one of the types of mutual investment funds, which are described in detail in the article..
The object of investment is, of course, venture enterprises. The capital of the Foundation is formed by investing individuals. We are talking about the trust management, in which the contributor does not solve independently in the Central Bank of which companies to invest. For him, everything solves the management company. It is worth noting that it usually can be trusted. Venture investment is her professional activity, which gives very good results. In addition, funds are convenient because the attachments are diversified. This means that capital is distributed among several starters, which significantly increases the likelihood of success of investments.
In addition, VEF is very carefully choosing investment objects. The business plan should be very detailed and competent, special attention to the novice strata has to pay a justification for economic efficiency. Most often, preference is given to those entrepreneurs who have experience in the experience of successful creating profitable business.
Private faces that have modest investment opportunities are best to contact the venture capital investment fund, since the fund takes even small investments. At the same time, capital receives the highest possible protection during risky investments.
Under the financial structure, the Group of Companies is intended by the general guidelines with a wide range of interests. For example, a group of VTB, which has more than 20 companies functioning in different segments of the financial market. Such groups sometimes finance startups. Such activities are rarely regular. It is quite difficult to achieve money. The business plan should be truly reasonable. But for the developer, the idea of \u200b\u200bcooperation with such a holding is very beneficial to the fact that at its disposal there is a huge resource, both financial and personnel. Organizations of this kind are in all their forces protect their investments, so they will provide all the necessary assistance to the entrepreneur.
Such a poetic name is completely not inherent in dry financial terminology. It appeared at the beginning of the 20th century. Business angels called very wealthy people in Europe, which invested their capital in performances. Now such people are called mostly producers. And the concept of "business angel" has acquired a little different meaning.
Now they are so called people who invest money only in those areas that they are close to where their own skills can be useful. That is, the essence of investment in the case of angels is reduced not only to get the highest possible profit. An important point is the practical application of its skills and moral satisfaction from the process. This is the main difference from venture investors. Who are business angels? These are millionaires with excellent education. Most often they invest money in high-tech startups.
Of course, each starter seeks to find a business angel as an investor! Because in this case there are no long-term approval procedures. Often everything is solved in conversation: either interested, or not. In addition, BA most often finances an idea in full.
The state also participates in investing venture enterprises. But in order to get this money, a novice entrepreneur has to overcome bureaucratic obstacles. It is necessary to reach each instance, stand up, draw up a competent business plan. And this is all just to participate in the competition. And then it remains to hope that the project will consider sufficiently convincing and allocate funds under it. It is worth considering such a factor as bribes. The project can win if you pay the right people on time. Therefore, it is worth forgetting about honesty.
There are two options, how to start investing in venture projects. It all depends on your abilities, desires and, of course, opportunities. So owners of decent capital who wish to accommodate it profitably can do it on their own. And those who do not have a large amount will have to take advantage of the intermediaries.
So, if you have several thousand dollars who want to post to get the maximum benefit, then what needs to be done.
Step 1. Choose a segment in which there is a desire to invest money.
Of course, it is better to choose what is close and familiar to you. If you understand programming, it is better to choose a startup that is directly related to writing programs or applications. The fact is that you will be much easier to appreciate the realism of the idea, its demand and feasibility. You can also evaluate which volume of investments will be needed.
Step 2. Select the project.
Where exactly look for startups for the first investment will be talked separately. When you already have experience in venture financing and truly large capital, entrepreneurs themselves will find. So, choosing several options you need to evaluate their prospects. These parameters are important: a business stage (start, access to profit, expansion, stable operation), the essence of the idea, the required amount, financial calculations. Naturally the most risky investments are those that need to be investigated at the development stage. Any investor is happily invested in a business that has already paid for profit and showed its viability.
Step 3. We conclude a contract.
Quite often you have to invest ideas that are not issued legally, that is, there is no LLC or JSC. Therefore, it is legally quite difficult to arrange it, so it's best to wait for the creation of Yul, after which to invest.
Naturally, the easiest way at the first stage is to create LLC. In Russia, few startups go to the IPO, so the joint-stock company does not make sense. Then may three options:
The last option is the most risky, since there is no sufficient legislative framework to protect the depositor. It is best to make money in LLC at the stage of its creation, or make a convertible loan, which can be exchanged for the company's shares if it is re-registered with a joint stock company.
Step 4. Take an active part in the company's activities.
When all the formalities are settled, it's time to make efforts for the success of your investment. To do this, keep track of all business processes, help your knowledge, connections and so on.
Step 5. We make a profit.
In the ideal situation, the company will start selling its shares on the stock exchange. After entering the company to a stable profit, you can sell shares. Most likely, the profit from the initial investment will amount to hundreds of interest or even more. Such shares will gladly buy investors who invest in low risk tools.
If the venture company will remain a Ltd., then having a share in business, you, one way or another, will receive income from your investment. A share in society can also be sold if necessary.
Those who do not have enough funds for large investment should not be upset. There is always a way out! Therefore, the best option will be the acquisition of shares in the venture capital investment fund, which we have already mentioned earlier.
Step 1. Select Foundation.
Step 2. Opening an account in the bank.
Step 3. Visit to the Foundation.
Step 4. Transfer of funds from your account to the FIF account.
Step 5. Obtain a confirmation of the enrollment of the depot of the Panel's account.
Step 6. Sale of shares, when the price of the PAY will grow to the desired level.
Through venture investment funds to invest very simply. You only need money transfer. All other work will be performed by the management company and the depositary.
At the beginning of the activity, the investor may encounter the problem of finding a suitable project. It is difficult to offer an option that will be suitable for everyone, so we will offer three at once.
Option 1. Friends, acquaintances, colleagues, relatives.
Probably, now you thought that no one has a great idea for a startup. But it's not about themselves, but about those who know your acquaintances. There is a theory that all people are familiar through 6 handshakes, so to find a person you need to communicate as much as possible. Perhaps your friends know a person who knows a person and so on. The search for a startup is problematic only for the first time. Then you simply "turn out" the necessary dating.
Option 2. Exchange.
Internet capabilities are affected by imagination. It does not fail and in the case of the search for a venture project. For quite a long time there are sites that combine investors and entrepreneurs among themselves. Such intermediary services are called stock exchanges. For example, Inproex.ru.
Option 3. Collective investments.
There is another type of stock exchanges that offer all operations on the purchase and sale of promotion of venture firms directly on the site. You independently form your investment portfolio and choose which projects to invest. Such platforms offer many I / O options, including through electronic wallets. A bright representative of the Exchange Exchange is ShareInstock.
For those who do not want to independently take investment decisions, it is best to trust professionals and invest in specialized venture capital funds. We have compiled a rating of the best, whose activities are tested by time.
Which fund to entrust your funds to solve only you. It is important to assemble the maximum information on the basis of which the decision must be made.
Where to invest in pursuit of overdodes? Oil, cars, construction? The answer is somewhat discouraged. Invest in unexpected innovative business ideas, technology and products of any industry. Such investments are called venture. The history of the global economy shows that most members of the Forbes list became such in their time only thanks to venture investment. And it is no coincidence. Only new ideas will provide you with a strategic competitive advantage. Like any other attachment method, investments in venture projects have their own characteristics, advantages and disadvantages. Invest with the mind!
Investment B. highly asked innovative projects aimed at receipt super slow in long-term perspective.
The above definition laid all the key disadvantages and advantages of venture capital investment.
Innovative projects are aimed at finding and launching a new product to the market (business idea, technology, product or service). There are several options for innovative strategies, in particular:
The high risks of the project are associated with the innovative nature of the developments and are in the absence of any guarantees of the return of nesses. Investor should be ready to lose his money in advance.
The long-term project is as follows:
The goal for which the venture investor is included in the project. The features of venture capital financing discussed above do not allow the depositor to be content with normal market profitability, otherwise the project will be not effective. Target effective annual return rate - from 25-30 to 100% or more.
Such profitability investor expects to receive not at the expense of a share in the current profit (for example, in the form of dividends), but only by the growth of the cost of capital of the company. The latter is determined by the market price of capital, which is expressed:
Tip! On the prefinal or final stage of the project, you can independently assess the cost of capital by the method of discounting future cash flows from the project. This cost is called strategic. To its assessment, you will need an accurate understanding of current income that generates a project, as well as potential future income (strategic financial plan for 5-10 years).
small and medium innovative companies with high growth potential;
just people promoting the idea and have already had successful experience in the past.
Low forecast accuracy.
Often, the complex structure of the transaction and a large number of participants (private and government investors, mediators in the form of venture funds and management companies, etc.). The importance of legal and organizational issues.
If you invest in one project only and have strategic interest to it, then you turn into a venture capitalist. In this case, it is vital to ensure the most complete control and management (for example, become a general director or log in to the board of directors).
If you do not have a strategic interest, do not limit the project, but collect their portfolio, then you become a venture businessman. In this case, internal readiness and focus on timely output is required for you.
The average life cycle of investments in venture business does not usually exceed 5-10 years. During this time, venture capital organizations should achieve such economic results that would allow depositors to completely return funds and get out of business with profits.
Search for new business ideas, technologies, products, projects under the development or launch stage, promising young companies. You will need time and money. Criterion of choice: the possibility of obtaining super-profits in the long run. Analysis direction:
Investor risk: Maximum.
Completion of research and preparation for launch. At this stage, it is important:
The paradigms of traditional direct investments can largely contradict the principles of venture capital. Entrepreneur Derek Bittar (Derek L. Bittar) allocated seven major differences in the views of venture and traditional investors.
Most investors do not understand that traditional investment paradigms do not need to be applied to venture investment. A typical problem is manifested in new ecosystems: the classic direct-investment paradigms retain strength, and no one introduces the best principles of venture capital.
Successful venture investors are not afraid of failures. In just one day, the startup can completely transform its business model, because such complex decisions need to be taken as quickly as possible. Therefore, the guide should be ready to change. Even more than the rapid course adjustments should be part of the daily work of the startup. - One of the most popular techniques of any successful startup.
Venture investors understand that startups have to make decisions quickly and flexibly to capture markets, destroy old segments and create new ones.
The traditional investor seeks to invest in the growth of one company over several years.
Venture capital works in more compressed temporary framework (12-18 months per cycle) and implies subsequent rounds of investment.
Large companies are planning long periods of growth and provide for this positive cash flow. They attract loans to pay operating expenses and maintain cash flow in the long run. Share capital increases in response to external circumstances in order to cover costs. In other words, what is bought for stocks must be tangible.
Startups, in turn, rarely have a positive cash turnover, and even less often generate profits. Thus, it does not have to count on borrowed funds, and the only way to finance the growth of the startup is to invest in share capital. Means go to operating expenses and to achieve certain stages that will help hold next rounds of investment.
Venture capital goes to cover operating expenses and achieving short-term goals to proceed to the subsequent investment round.
Traditional investors hold positions in the board to monitor the development of the company.
Venture investors hold positions in the board to be the most useful as possible for the startup.
Traditional investors prefer to influence the adoption of strategic decisions in companies. They invest in a business who consider promising, without regard to the ability of the current leadership. These leaders often replace those whom the investor recommends. If these performers do not cope, others find others.
From the point of view of the venture investor, such a policy may prevent the development of a truly promising business. Instead, they prefer to invest, as they believe in the ability of the founding team to realize their vision. Venture investors practic a constructive approach. Even if they have their own position in one way or another, they trust the vision of entrepreneurs and leave the final word for them.
Successful venture capital investors establish such management rules that give start-ups to experiment and bring the company to exponential growth.
Traditional investors often compete with each other for the right to conclude a deal, and sometimes even conflict within the board of directors.
Venture investors believe that they can cooperate with competitors for the benefit of the startup.
Traditional investors rely on their ability to find opportunities inaccessible to others. Therefore, transactions are concluded in conditions of strict secrecy and bureaucracy, requiring the signing of non-disclosure agreements, treaties on intent and other documents. Negotiations usually occur in an aggressive manner to avoid the appearance of "unwanted" players.
Venture investors in the spirit of rivalry also do not occupy. However, the spirit of cooperation and coexistence is also distributed in this industry. Often, different investors unite their efforts to increase the chances of the startup to success. From time to time you can see that venture capital investors are truly proud to be able to attract someone from their colleagues to the deal. Moreover, no one signs up for saving time and money about the non-disclosure agreement, and the paper work begins with the stage of intent agreement.
Competing venture capital investors can cooperate with each other if it benefits both sides.
Russia has many competitive advantages that stimulate investor interest, including foreign ones. The domestic economy is a capacious market for capital, has a great potential of internal demand, highly qualified personnel. In the aggregate, it creates excellent conditions and opportunities for venture investment.
Modern definitions of the concept of "venture investment" are ambiguous. Scientists have developed several options, and each of them is used in profile literature, among experts. Some believe that venture capital investment means financing activities in the field of technical, technological, scientific innovations, which are not yet implemented in practice. Others argue that the term is correctly interpreted as the commercial sale of innovation, resale the results obtained using the "risk" capital. But all experts are unanimously in the fact that venture capital investments are a system of mutually beneficial relations between venture capital funds, private individuals investing in innovative projects and developers. For this, a unique idea must necessarily have a large market potential. Such a format of investment means a high level of risk, which in the theory should be met by a high income indicator (from English Venture is translated as risk). The venture capitalist who has invested money is lossed on a par with the developer of an innovative project.
Council: Find a profitable partner for venture capital financing in the person of a private investor who will be interested in the implementation of profitable business ideas or venture capital funds, for example, Runa Capital, IMI.VC, RU-Net Ventures, Kite Ventures, etc.
The characteristic features of venture capital investment are the long-term return of investments (especially in the field of biotechnology, medicine) and the need for large investments at an early stage of project development. Bank loan for these purposes is difficult to obtain, as financial institutions refuse to give loans for intangible assets and cannot evaluate new business models that will not soon receive income. Therefore, the best option for financing innovative projects is cooperation with venture capital investors or funds. The latter will accumulate serious capital at their account, receiving income from successful projects, startups. They can finance the company even in the absence of collateral. Insurance companies, private investors, large corporations become their participants. On average, venture funds operate no more than seven years. Often they not only finance projects, but also contribute to their development, providing consulting support or occupy the place in the Board of Directors. As a rule, their participants do not seek to have the right to vote in management or very deeply delve into the daily problems of the company. After all, often venture capitalists invest in several high-profile enterprises (despite this, they have nothing to do with fraudulent projects built on the principle of financial pyramid), and they have no physical opportunity to delve into each trifle. Profit gets, as a rule, only a few years due to net income from investing, the growth of the value of shares.
Criteria for assigning firms to projects in need of venture investment:
Spheres where venture investors can work are very much, but most often they invest money in biotechnology, innovative ideas, construction, restaurant or. The result of successful investment of such a plan is Apple, Intel, Facebook, Alibaba, etc. It is fundamentally different from - the main goal of venture capital financing is not to solve problems of production activities by attracting a wide range of persons with professional knowledge, and investing risk capital in promising ideas, projects In order to obtain high income. Sometimes investors become co-founders of venture capital firms. If possible, they are trying to invest in several projects of a different profile in various fields, achieving a reduction in total risk.
Self-financing is the main source of initial capital for the majority of firms in new technologies. But venture funds reluctantly finance small enterprises (regardless of the quality of their work) due to the specifics of the investment criteria, the high cost of expertise, the complexity of the monitoring. The average yield of venture capital funds in the world is about 20%, which exceeds the average profitability of other organizations, in Russia - 30-35%. The cost of a share is rarely less than 1 million rubles. Venture investment is a very risky, but also a very profitable activity. A risky type of earnings (income from it will be significantly smaller) consider trade in binary options. ? So call the agreement between the two parties, allowing its owner to buy or sell a certain asset (stocks, bonds, goods) during a specific period of time at a prescribed price.
Council: According to the law, only legal entities can be in the venture capital. Therefore, in order to become his participant, you first need to register your company, acquire certificates, obtain complete information about the objectives and methods of the Foundation's activities.
For small firms and most private innovative projects, the only way out is to search for venture capital investors. They are also called business angels. They always have great personal capital and are ready to invest money back at an early stage of development. Do it individually or groups. Net income is expected usually no earlier than 5-10 years. After the end of the project, the share most often is sold in the market or company itself.
Council: Get a maximum of income from venture investment under any market conditions will help. Their main goal is not a risk limitation, but to ensure the profit in any direction of the motion of market prices. Investor need to choose a partner among such organizations very carefully, because their existence is not issued by the legislator, and the applied strategies have different efficiency, not always high. In any case, attentiveness and professional training of the investor are mandatory conditions of the transaction.
Most entrepreneurs who are planning work in a small business are interested in the answer to the question. There are quite a few options (opening of its production, enterprises for the provision of services), but ventureal investment unequivocally does not fit. After all, its scale is rather large - from 50 thousand dollars to several million.
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The underdevelopment of the business infrastructure of our country, the remnants of past years prevent the rapid formation of the new financial industry - venture capital investment. But now it is one of the basic sources of financing for many modern companies, small and medium enterprises.
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Hello, dear readers of the financial magazine "Site"! Today, the subject of our conversation will be venture investmentused to finance new or growing companies, as well as talk about venture Funds and Investors - Professional participants in venture business.
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What is venture capital investment and how venture capital funds work, as an investor to make money on venture (risky) investments, what are the features of attracting venture capital for a start-up - about all this and not only you learn by reading this article to the end
Term "Venchur" borrowed from English denoting "risk" or "Risky Start" . Venture investment does not bring instant earnings to his investor. Such are long-term and high-adjusted .
Venture investment - These are risky investments in promising innovative companies () in order to obtain a significant (higher average) income.
The risk is that money is invested in absolutely new ideas, technologies or product. Bring it lesion or profit Investor will show only time. In case of unprofitability of the new enterprise, the investor simply loses its invested funds. But in case of good luck, the investor gets super-profile, that is, much more invested.
At the initial stage, the investor carries out its investor in a new business, and when the company goes to a fairly high level of profitability and development, it has the opportunity to sell its part (share) in the company at a higher price. That is, the increase in the value of the share (shares) of the company owned by the investor, and is its main source of profit.
The income of the venture investor \u003d value of the implementation of the share (shares) – Amount of investment
P.S. Venture investment is not always an investment in the authorized capital of the company, in rare cases such financing may be in the form of credit.
Venture investors can be both individual individuals and large organizations and corporations, as well as syndicates and funds, regardless of their activities.
5 most attractive sectors of the economy for venture investment
Sectors of the economy, which is beneficial to invest in Venture Investors
The most attractive sphere of the economy to attract venture capital investments are information Technologies, Internet, Software, Mobile Communications and Telecommunications. In this sector, entrepreneurs are ready to invest major money in new developments and innovations.
Health, pharmaceuticals, biotechnology Have greater interest in the West than in Russia. But recently there has been a tendency to increase investment in this sector.
Industry and construction Not so fast and dynamically develop as previous two sectors. Such sectors of the economy are considered inert and conservative, but at the same time with the ability to bring big profits for risky people.
By the way, on our site there is a separate article in which it is described in detail about, and also the best start-up directions in Russia, where you can invest money.
What is a venture capital and what is the scheme of his work to which venture capital funds invest, and what experienced investors are earned - read more
We give the definition of the concept of "Venture Fund".
Venture fund - This is an organization that is engaged in investing funds to new, innovative and young projects.
The activities of venture funds are associated with high risks, but also with a big potential profit.
Venture funds can be:
As a rule, venture capital organizations invest in several projects in order to differentiate risks.
According to statistics 70 % of financing objects are unprofitable , but the rest 30 % bring significant profit , overlapping all risks.
In whom the capital of venture funds invest:
Venture funds are created, as a rule, experienced entrepreneurs - financiers, which work according to such a scheme:
The last stage is the finalSince it is determined that the cash investor will bring the income on which the investor was initially calculated.
Why new companies with new ideas choose the venture fund, and not a bank loan. The advantages of this quite a lot.
for example, get a significant bank loan for a new idea, even with a profitable and far-reaching business plan, almost impossible. But by contacting the Venture Fund, it is possible not only to attract investment on the development of the project, but also to use training programs, mentoring more experienced entrepreneurs, preferential lending.
The comparative characteristics of venture funds and bank loans is shown in the table below:
|
Venture fund |
Bank loan |
|
Providing repayment |
|
|
Pledge |
|
|
Share in the company |
Property or guarantors |
|
Conditions for payments |
|
|
Tranches to achieve a certain level of profit or from the sale of shares |
Fixed monthly constant payment with interest |
|
Participation in the Company's Development |
|
|
There is, since an investor is interested in this personally |
No, since bank institutions are interested only in returning their funds |
|
Opportunity to receive money startup |
|
|
Cash Return Terms |
|
|
There are no clear terms, it all depends on the complexity and introduction of the company's idea to life |
Stated in advance in the contract, and non-compliance with them leads to the accrual of penalties and fines |
Thus, the summarizing can be said that the involvement of venture investment will bring the company not only money, but also support at different stages of development and promotion of goods or service.
So what is a venture business?
Venture business (From English. Venture Business - a risky business) is a risky and long-term business in the field of investing innovative (Sturtup) projects.
Usually, venture Organization (Fund) This is a team of investors who are together and having sufficient experience, work to achieve maximum profits.
Venture business features:
An example of competent business management by venture capital funds:
| Amount of nested money (in US dollars) | The cost of selling stocks at the output (in US dollars) |
| Messenger Whatsapp | |
| 250 thousand | 16 billion |
| Twitter service | |
| 5 million | 15 billion |
| Oculus virtual reality device | |
| 250 thousand | 2 billion |
As you can see, the profit significantly exceeds the amount of invested funds, which is the main goal of the work of venture funds.
Venture financing - It is high-adjacent in promising innovative business projects in the early stages of their development. It has several stages of different duration.
| Capital |
| Investment in the market research and marketing |
| Start-up capital |
| Financing of preliminary development for the launch of production |
| Initial growth |
| Advertising financing, customer search, sales markets, self-sufficiency so long |
| Fast growth and expansion |
| Transformation of the company to the joint stock company, the purchase of property rights to another company or the transition of it under the control of the enterprise |
| Redemption with profit |
| The management of the company decides to buy it from current owners |
| Transformation of property |
| Some owners or the management team of the firm buy out all its shares that are in circulation and again transform the company to the private |
The ultimate goal of venture capital investment is achievement of the company's liquidity, that is, the stage on which the company is able to place its shares and securities in stock markets and receive income.
The duration of all stages depends on the type and specifics of the development.
Phased earnings on venture investment
Does the profit and success will bring a business depends on many factors, and most importantly from your actions. Actions should be clearly systematized in stages and are accurately fulfilled only in the sequence below.
This is the initial stage, because when a person proceeds to the introduction of the project, you need to have at least the necessary initial capital for the first time. Investor can finance as partially, so I. fully Development and implementation of a project or idea.
At this stage, it is important to explore the situation in the stock market. About and how it works, we have already written in the past issue.
You may find a free sector of the economy for your project or company or find out what you have an innovative product that is not yet available on the market and will be exactly the first.
The project for future development is selected, it is now important to stop and think, analyze all the risks associated with the activities of the enterprise. And only then proceed to developing a plan for developing and implementing it to get the maximum benefit. This may require the conversion of the company from private in joint stock.
In one of the articles of our magazine, you can read about, or download ready-made examples of business plans.
The financial component you discussed, now it is important to do legal issues. In this issue, it is worth to give preference not to financiers, but by lawyers qualified in this matter to avoid disagreements in the future.
Venture investors are personally interested in the prosperous outcome of the company's development. They not only invest money, but also directly monitor the activities of the enterprise.
They take an active part in the process of developing a concept, planning, identifying new directions in activities. Venture investors, as qualified specialists in this area, give advice on any other issues and useful tips.
When the company reaches a significant financial situation, it brings sufficient income, investors begin to think about selling their shares. Bought such shares other depositors who prefer work not related to large risks.
Attracting the Venture Fund for Startup Project
What is venture capital? Let us define this concept:
Venture capital - this is money investors who finance startup projects (Young promising companies).
The usual organization (fund) of venture capital receives more 1 000 requests per year to finance startup projects from which 90 % Immediately sifted. The causes of deviations may be inconsistency geographical, technical or market politics Venture Company, as well as illiterately compiled business plans, requests and documents.
Most venture capital companies work with those projects or ideas that require investments worth from $ 250,000 to $ 1,500,000 $
The remaining 10 % are subject to a thorough and expensive study by different parameters. This company employs consultants to evaluate the product or idea, especially if it is new and innovative.
Such a check makes emphasis on the following indicators:
3 Important Startup Project Check Parameters
If venture capital company conducts such research, spending significant amounts, it means that it is interested in the idea or product. At this stage, companies are also eliminated, and only remain some With which an investor is ready to work and risk your own cash.
The process of attracting venture capital Startaper can be reduced to the 4th main and very important stages to obtain guaranteed funding.
The process of attracting venture capital - 4 main stages
The most important factor for a potential investor is availability of qualified company personnelwho are competent in this area of \u200b\u200bproduct activities. Everyone must be clearly set out. And as a guarantee of the interest of the company's managers in obtaining maximum profits, they should be co-owners companies.
As for the market of sales or niche, which your innovative product is ready to occupy, then here is a direct connection: the more market you intend to conquer, the higher the chances of getting financing. This displays an investor and strengthens your competitive advantages over the rest.
Important Also objectively assess and describe all sorts of upcoming litigation, difficulties with obtaining a license, especially for a new product. I.e as carefully as possible Go to the analysis of the costs of future periods related to the company's activities.
The share of venture capital in the company can hesitate from 10% to 80%If the company has insurmountable financial difficulties. Usually, part of the stock of the investor does not exceed 30 %, Since the owner must have a stimulus and personal interest in the development of his company.
The newcomer is important not just to find like-minded people who believe in his product or an idea, and the main thing of those people who can invest their funds in its development and promotion in the market.
Few of the beginners have sufficient funds to create a company, so there is an eternal question, where to look for investors. There are several options here:
Most likely, a novice entrepreneur has no familiar millionaires, so the search is conducted among the nearest circle of the environment. The more you talk about it, the likely the likelihood that this will hear a potential investor, ready to believe and invest in your idea.
Example! Ordinary vehicle seller Jan McGlinn invested 5,400 euros in the business of his friend Anita Roddick, who opened the Body Shop Natural Cosmetics store, having received a company's action in return. Subsequently, the company has grown to 2,000 stores, and she bought a giant in the field of cosmetics L'Oreal. Net income Yana McGlinna amounted to about 180 million euros
In different parts of the world and in various countries, forums are held on which many potential investors with one goal are coming out, seeking new to invest their own funds.
You can also use the Internet and investment project portals. There are many useful information on them, it is possible to put your project or idea and itself find sponsor Or wait until he comes to you. The most popular portals are Startup.ua and Inproex.ru.
One of the options for collective investments is Operating online. This is such a service specializing in the placement of ideas and promoting its projects.
The number of participants is minimized:
Curators There may be various organizations that are of interest and are ready to support the project. Supported, it is worth understanding the financing of advertising to promote the product, the provision of equipment and technical means.
Crowdfunding platforms include all product information:
Depending on the service, the platform cooperates with different payment systems.
Most of the resources are social And they can go with the help of the Internet and the acting account.
The user has the right to trace the activity of other participants, to obtain information about the projects created or financed by it. It is also possible to communicate with the author of the project or the idea that I liked.
The birthplace of such a risky type financing is considered America , but in Russia This species can be said, always attended. An example of this can serve different development in the field of the country's military-industrial complex. Initially, only thanks to venture investment, this sphere of Russia reached such heights. Although the investor in this case was the state, not private individuals and companies.
Regarding the remaining areas of the economy, then initially even in the most promising projects in the territory of Russia investment only foreign investors. But today they have been formed and successfully function domestic venture funds .
In the Russian Federation, there are about 20 venture capital funds. We will provide a list of 5 best venture funds in Russia:
These venture capitalists were evaluated for the following criteria and received appropriate balls:
Estimates of the Top 5 Russian Venture Funds
Now consider these domestic venture funds. (Let's make a brief overview for them) .
Founder of the Foundation Russian entrepreneur, willingly and competently investing money in startups in the Russian Federation - Sergey Belousov. The success of this Fund is based on knowledge, experience and marketing.
Startapy Belousov have a victory in the competition from The NEXT Web.
In general, thanks to competent policies and support, the braes of this fund are successful (Rolsen, Parallels, Nginx, Jelastic, Lingualeo).
from 20 % before 40 % and investment achieve 10 million dollars
Foundation was established in 2006 Andrei Baronov, Ratmir Timashev and Nikolai Mityushin. The main sphere of their interest is the innovative software development.
The properties of this fund is its readiness to invest not only in the startup in the development process, but also at the stage of growth and expansion.
In the process of development invest before 4 million dollars 20 -35 % Firm shares, and in the process of growth and expansion - to 15 million dollars in exchange for 15 -30 % shares.
Successful projects of the Fund - Acronis, Kupivip, Oktogo.ru.
This fund is a state in the field of innovative scientific discoveries. The feature of this fund is not too obsessing the Company's management policy, but to obtain funding in this fund will have to carefully prepare the documentation, because it works in conjunction with a venture partner.
The share that the fund receives for funding is 25 % .
Famous projects - Wobot, "Ceramic Transformers", "Membrane Technologies".
The fund was justified in 2008 Evgeny Gordeev. Initially, this fund was created in the form of a club. Founder of the Foundation Professional in the field of information technology and perfectly understood in the peculiarities of the Russian consumer of this market. Startups that this fund selects for themselves adapted by concept and climate to the Russian market.
Since 2011, the development of a new vector is the development of projects at the stage of development of prototypes. Breakdown share is before 20 % and the sum of the invested funds from 35 thousand dollars before 500 thousand dollars
The principle of operation of this fund and its founder is fuel and speed in decision making (up to 30 minutes).
Famous and successful projects - Pluso.ru, Okeo, Ogorod.
This fund was founded in 2008. His capital is 20 million dollars And there are 13 projects. His specialization - startups designed for the domestic market at the initial stage of development, to the level of expansion.
In 2015, the Foundation signed its largest transaction for 7 million rubles of investments in the Offline-Network Business Family.
Successful projects - Mirapolis, ActiveCloud, Daripodarki, Magazinga, Client24.
We will analyze some common questions.
Business angels - These are single entrepreneurs who invest their capital in starting projects.
The first "Angels" appeared in the early 20th century. These were a fans of the theater who invested their money into new productions and received income only if the play was successfully.
Now the business angels are entrepreneurs who have experience based on the successful development of their own business. Statistics show that this is most often a man ( 99 %) having a higher education or a doctoral degree and solid experience in management. And every fifth of them - millionaire. (In one of the articles of our magazine, read about, with full zero - billionaire tips will help you to achieve the goal).
The priority interests of business angels are informational and high technologies, and intelligence. They receive their profits when selling the company's shares already enlarged.
The principle of work of business angels and venture capital funds is almost the same, so they are both aimed at the end result, but there are differences.
Comparative characteristics of business angels and venture investors:
| Business angels | Venture investors |
| Source of funds | |
| own funds | attracted capital |
| Investment in one project | |
| up to 1 million dollars | up to 5 million dollars |
| Location of the project | |
| important | less important |
| Management style | |
| informal | sufficient high level of control |
| Monitoring | |
| active and detailed | strategic |
| Number of transactions per year | |
| 1-3 | 15-18 |
| Format of attachments | |
| primary financing and practical knowledge and experience | a large amount of money, help creating a team and knowledge of the field of activity |
As you can see the differences minor. Another property of business angels is that to attract them to cooperate is easier and easier than venture organizations.
Projects of business angels who have achieved considerable success: Intel, Yahoo, Amazon, Google.
Over time, the spheres of interests of venture funds changed. If earlier, until the mid-20th century, the most attractive sectors with the highest return were commerce (oil, weapons, drugs), content of gambling institutions, etc.. Now interest to venture organizations represent high-tech sector, telecommunications and health .
Venture funds may have as narrow specialization and to be complete Depending on the volume of capital investments and strategies. They are not tied to a specific region.
Also financing with such organizations occurs not only at the stage of formation and launch of the idea, as well as at the stage of expansion and growth.
Venture investors are not passive in the field of company management, because they are personally interested in successful development. Therefore, they use all their existing experience and knowledge they advise companies at all stages of development.
Venture business - This is a very risky activity, but at the same time high-catching. There are special professional communities, taking into account this business. The main bias is made on search, choice, evaluation and specific funding Selected project.
Before investing in a venture business, it is important to determine the main key moments, such as:
If there is no needed amount of money and there is no experience, you can contact a professional venture capital or business angels that will make all the work for you.
Venture business, no doubt, even despite high risks in financing projects, a fairly popular and attractive business in the world, since only he can bring superprint Investor. It is also a kind of "rescue wand" for new ideas and innovations. It is important to deal with its basics and nuances, for this we wrote this article.
Our team of the site project hopes that this material will help make the right choice and potential investor, I. beginner Startier. Successes to you in all endeavors!
If you have left comments or questions about the topic, then ask them in the comments below. Before new meetings on the wanderer of our online magazine!
