Venture Capitalists (VCs) generate profits by providing equity financing to startups that have high growth potential. VCs buy the equity of a startup and liquidate their shares either through an IPO (Initial Public Offer) or through an acquisition. Given this situation, the growth potential and risk factor of the startup critically determine the profits VCs generate. The success of a startup depends on a number of factors. VCs carefully examine each factor before they decide to fund the startup. VCs assess the risk using the following factors: Founders/management team, competitive advantage, market potential, barriers to entry and exit strategy. Every year loads of entrepreneurs get venture capital funding simply by understanding that VC funding has been the main source of capital resources for MOST new businesses, even here in Nigeria.

This is what they are looking for

Entrepreneurs approach VCs to raise equity financing. VCs then fund the entrepreneurs and become partners. As partners, venture capaitalists will have a say in the direction of the company. At times, this might make entrepeneurs skeptical of VCs true intentions. Whenever entrepreneurs think of getting a VC on board, they tend to be suspicious at the subconscious level and fear unforseen ramifications. Entrepreneurs generally have the following questions in mind when they approach venture capitalists: will they steal my idea? will they take over the company, fire everyone, and bring in their own people? are they risk averse? is it true that returns and exit strategy are all that matter to them?

@headworld, would you and your team at Kinetics Associates be interested in co-facilitating our forthcoming "Angel Investor & Early-Stage VC Workshop"? If yes pls call me, Shina on 08027032126. Thanks.

FOR MORE ON VENTURE CAPITAL IN NIGERIA AND LIST OF VENTURE CAPITAL FIRMS AND INVESTMENT BANKS IN NIGERIA SEE

http://www.vcinvestmentpartners.com/how-venture-capital-work/