Venture Capital（八）.pdfVIP

Venture Capital An Overview Economic Affairs Committee Jan. 23, 2004 First Question: What is the state’s goal regarding venture capital? n Economic development? n More jobs n More business contacts and spinoffs? n More wealth? n State tax base n Investor wealth n Regional boost to economic development? 1 Who Provides Investment Capital? n Core Investors n Entrepreneur, Family and Friends nAngel Investors nVenture Capitalists n Economic Development Offices n Federal, State, Regional and Local n Banks, through Conventional Loans Who are Angel Investors? ß Fill gap between friends/credit cards/ family Venture Capital Investments/ Bank Loans. ß Typically invest between $25,000 and $250,000. ß Invest advisory time as well as money. ß May require preferred stock, board seat. 2 Following the money n Investors pool $$$ in Venture Fund n Venture Fund is a company that: n Takes fees for services n Invests in start-ups n Offers advice, including management assistance n Start-ups provide return on investment n Through public or private offering, mergers n Through tax credits, if available n Venture Fund cashes in/moves on How some State-Funded Venture Capital firms work: Venture Capital Firm Early -Stage Business (Comprised of Investors) - - Seed start -u p Early -Stage Business - - Expansion State Tax Incentives Early - Stage Business with near - term bu