Buffy Posted January 10, 2006 Report Share Posted January 10, 2006 1. an idea which can make big money2. a protected idea ( patents) i personally have 8 patents. 3. willingness to give up part of your business to the VC companythis does not guarantee that you will get the money, but the money is there.Sweet! Key caveats bolded! Replace "part" with "most!" Even with "big" there's no guarantee! You must have some totally awesome patents there Q if its so easy for you! There's lots of money, but I'll tell ya, most of it is sitting in the bank because the VCs are so cautious these days, and they'd much rather go for B or C round funding cuz its safer. And you'd better get 3 or 4 lined up on seed round. Tain't what it used to be, even compared to pre-Amazon days... Sillycon Valley Old Timer,Buffy Quote Link to comment Share on other sites More sharing options...
questor Posted January 11, 2006 Author Report Share Posted January 11, 2006 the purpose of a venture capital group is to lend money. they want to lend money, they just want to lend on their conception of a sure thing. the moneyavailability fluctuates with market forces such as interest rates, consumer confidence, economic projections, etc. a majority of VC groups may only deal with certain industries or types of businesses. Quote Link to comment Share on other sites More sharing options...
lindagarrette Posted January 12, 2006 Report Share Posted January 12, 2006 the purpose of a venture capital group is to lend money. they want to lend money, they just want to lend on their conception of a sure thing. Not necessarily. Banks will lend money if enough collateral is available to cover potential loss. The SBA is more likely to lend money to minority groups (not including women any longer), but only after a long wait and substantial up-front fees. The don't really care if it is a "sure thing." There is no "sure thing." Quote Link to comment Share on other sites More sharing options...
questor Posted January 12, 2006 Author Report Share Posted January 12, 2006 Linda, we are not talking about banks. the discussion was about venturecapital groups. they do not have the same federal requirements or restrictionsas banks. venture capital groups make their own rules and will frequently take a 50% share of your company or a partnership interest to lend the money. they want to insure the company's success. you are correct about the no sure thing, but they do everything they can to protect their capital and insure success. Quote Link to comment Share on other sites More sharing options...
Biochemist Posted January 12, 2006 Report Share Posted January 12, 2006 ...The VCs are all looking for a "cure for cancer". If its not going to be a $5B company in 3 years, they won't touch it. I've raised tens of millions from VCs, but they won't come near my latest company because we're targeting a "niche" market. Its not as easy as it looks!...Agreed. I've closed a couple of rounds myself. Although the $5 billion hurdle is a little high- you must be dealing with some tough hombres, Buff. Many VCs will settle for $50 million in revenue by the third or fourth year. But that still certainly excludes a lot of interesting firms. Quote Link to comment Share on other sites More sharing options...
Biochemist Posted January 12, 2006 Report Share Posted January 12, 2006 ...There's lots of money, but I'll tell ya, most of it is sitting in the bank because the VCs are so cautious these days, and they'd much rather go for B or C round funding cuz its safer. And you'd better get 3 or 4 lined up on seed round. Tain't what it used to be, even compared to pre-Amazon days...Agreed again. Quote Link to comment Share on other sites More sharing options...
lindagarrette Posted January 13, 2006 Report Share Posted January 13, 2006 Uh, you've never raised any have ya? The VCs are all looking for a "cure for cancer". If its not going to be a $5B company in 3 years, they won't touch it. I've raised tens of millions from VCs, but they won't come near my latest company because we're targeting a "niche" market.BuffyYou are way out of my league. I thought raising one million was an achievement. My business doesn't even gross that much in a good year so I don't have a "prayer" with the VCs. Besides, I just provide a service which somehow doesn't seem to qualify. Quote Link to comment Share on other sites More sharing options...
Buffy Posted January 13, 2006 Report Share Posted January 13, 2006 Agreed. I've closed a couple of rounds myself. Although the $5 billion hurdle is a little high- you must be dealing with some tough hombres, Buff. Many VCs will settle for $50 million in revenue by the third or fourth year. But that still certainly excludes a lot of interesting firms.I overstated only by an order of magnitude or so: my last venture raised $15M and the expectation was in all seriousness $200M in 3 years... These guys know that they can write whatever they want on a term sheet and you have to take it. I'm very happy that my current venture is self funded and we currently own the whole kit 'n kaboodle...Now, cook for 3-5 years and sell it to Microsoft or Oracle.... Wears a skirt, but has cojones,Buffy Quote Link to comment Share on other sites More sharing options...
questor Posted January 13, 2006 Author Report Share Posted January 13, 2006 Buffy with your cojones and a mini.. you should be able to raise whatever you wish........ Quote Link to comment Share on other sites More sharing options...
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