Venture Capital and Entrepreneurship

“Entrepreneurship is about turning what excites you in life into capital so that you can do more of it and move forward with it.” 

What is venture capital?

Venture Capital is a financing mechanism and an investment channel for companies, investors and individuals. It is mostly invested in a start- up or any small businesses. 

The investors operating in ventures are called Venture capitalists. A Venture Capitalist aids in funds making and helps the company grow into a successful firm. 

Venture Capital and Entrepreneurship link:

Here, why is entrepreneurship needed? Entrepreneurship are the wheels of the economic growth of the country and are needed for accelerating the economic growth. 

Entrepreneurship helps in creation of new products and services which ultimately fosters the economic development of the state and country as a whole. How? By giving rise to the number of employment levels. By boosting the market revenues and increasing competition. By allowing the capitalists to understand the market economy and increase the potential, plus, their knowledge and awareness in the field. 

Here, for generating the running entrepreneurship ecosystem in the market economy, rises the need of robust capital inflows into the businesses field. 

Entrepreneurship and capital investment involves a huge amount of risks and investing potential. This stands as a major constraint in front of it. 

Venture Capital, a proxy form of equity investment, plays a vibrant role in bridging the gap between capital scarcity and high risk involved ventures. 

Owing to the vital role played by the venture capital in the new ventures’s continuity in the market economy; it becomes important in the eye of entrepreneurship to maintain a mutual relationship with the VC. 

Critical relationship between Venture capital and entrepreneurship

For maximizing the business revenues, creating and maintaining the positive relationship between the venture capital and entrepreneur are very important. 

However, due to clash in minds and differentiated opinions and ideas, there arises the conflict between the venture capital and entrepreneur.

 At the same time, ignoring the conflicts and not clearing the common goals and objectives could lead to serious threats in the company’s development as well as in the workings of the organization. 

A healthy relationship is required between the VC and entrepreneur to foster the performance of the undertaking. The gap between the two is to be filled with communication, knowledge and the co- operation. 

Research says that entrepreneurs having high skills and good experience in the field face less relationship conflicts, thereby raising more funding by venture capital. 

Good leadership and management by the entrepreneurs change the outlook of the organization. It increases the performance and reduces the uncertainty by building cooperation and confidence in the team mates.