Is Venture Capital A Right Platform For Investment?

by Ankita Sehgal Freelance Blogger, Lives in New Delhi

The existence of venture capital came into being in the late twentieth century and was a big leap in financial developments. Venture capital is a high-risk financing and a very common term used for it is ‘Unsecured Risk Financing’. The risk involved in this business is very high but so are the potential return values. Venture capitalists have to constantly analyze the potential and value of the technology and the business while they make any sort of investment. They not only provide the capital for the new organization but also bring the experience from various walks which help the entrepreneurs set their business and organize it well. The resources that come along with the firm are skills and guidance, the formation of marketing strategy and the overall management. It is important for the firm to contribute as much as possible to well being of a budding company.

Venture Capital can be broken into its two constituent terms to understand its meaning better. Venture signifies a new project in undertaking with the total uncertainty of whether it will bear profit or loss. On the other hand, the capital means the money required for the business. Every day there are a number of companies being formed that have the vision and capabilities to form a successful business but what they lack is the money to establish it. However, the venture capitalists are always looking to invest in something which can bring them better returns in future. The PE funds in India have largely grown because of the startup culture and the interest of venture capitalists in it. The highs and lows in the terms of profit or loss in funding have been termed as booms and busts and venture capitals have seen a lot of them.

The start-up companies have been on the target of the capitalists and funding firms but what is expected to revolutionize the equity PE fund market in India. Real estate is a primary business in India and has grown largely in last decade. There is a special interest of the private equity funding companies to help them bloom as when the time is ripe this industry can bloom profits and returns like no other. But in return, the companies as in the real estate firms have to realize the importance of the investment and have to work toe to toe to bring the profit to the firms and well as themselves.