Venture Leasing The Other Venture Capital（一）.pdfVIP

Venture Leasing: The Other Venture Capital By Jay Hollander Summary: Venture leasing is a creative vehicle that allows start-up companies to finance certain infrastructure and equipment needs. The practice has financial advantages, but it also carries some risks. This article explains what venture leasing is and how it works. Author: The author of this article, Jay Hollander, is a member of the GigaL Editorial Board and practices computer and Internet law with his own law firm in New York City, Hollander and Company LLC. He concentrates his practice on computer software and Internet issues. He is licensed to practice law in the state of New York. E-mail: jh @. Introduction Its no secret that the lifeblood of any early stage company is venture-capital financing. Without it, there is no cash to burn and no financial muscle to grow a company to profit or IPO. Historically less well-known, however, has been an additional vehicle for financing certain infrastructure and equipment needs that has allowed venture-stage companies to simultaneously cut down on their cash burn rates, focus their equity capital on their core business needs and often increase their valuations for IPO purposes. This vehicle, known as venture leasing, is a financing device for early stage companies that had been used relatively rarely in years past, but has picked up considerable popularity in the last couple of years, coinciding with the explosion in IPOs in the late 90s. Still, as we shall see, the use of this device is not for everyone. There are requirements that companies contemplating this type of financing should be prepared to meet and there are decisions to be made concerning the terms of such financing that early stage companies need to be aware of before electing to use it. What Exactly is Venture Leasing? So, what exactly is venture leasing? Simply, it is a hybrid of traditional leasing and venture capital meant specif