venture capital relationship problems

Venture Capital - The Odd Relationship Between Fund And Owners

Venture capital can be a necessary way of financing for a lot of firms that would like to develop significantly, specifically in technology or medical fields where capital prices are huge. That being said, the relationship involving the vc’s and shareholders from the business could be an extremely odd one.

Most businesses considering VC funding as a way to accelerate growth have unique ownership structures. Typically, there are just a few individuals owning a significant number from the shares. Moreover, he or she is usually the same individuals who started the business over completely from scratch. This gives them both a psychological and financial tie to the business.

The average venture capital fund manager is looking to get what? A company with serious prospects of going public or becoming purchased. There is no emotional attachment to the organization whatsoever. The only motivation that the manger has would be to make …