The concept of venture capital and more

The concept of venture capital and more

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Venture capital Venture capital is what is needed for a business to kick start. It is also needed in times when the business wants to expand itself. The funds that are put into venture capital either come from the already owned assets by the business or invested by investors or done with the help of loans from banks. Venture capital is required in projects that bear a substantial amount of risk. The major portion of money of venture capital comes through wealthy investors who want to see their money grow in the long run.

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Making the ground decisions If a business owner has a vision to expand in some years, then they may look at building up their asset base strongly. This means that investing in longer mutual funds, long short funds in India, property, etc. can real fare well for the business if planned correctly. For this reason, it is necessary that the business hires an external source of financial advisory. It could be an asset management firm or a wealth management company, depending upon their needs.

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What a financial advisory does When you hire a wealth management company or an asset management company, the manager who your profile is assigned to does a careful study of your present financial portfolio and then they device a plan to help your business grow in the direction you want it to. It makes the business selfreliant and sufficient so that in near future, they do not really have to depend on banks or heavy investors to grow their business. Although it is important to remember that this process takes a fair amount of time.

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How is it different from investment banking?

It is important to note that asset management is a very different concept that investment banking. Investment banking mostly deals in raising capital for a business but at a very high cost. Plus, asset management, as pointed out earlier is a process that takes a sufficient amount of time before it starts to show results. Investment banking on the other hand is very demanding and requires swift actions as well. the final decision could either get huge gains or loss for the business.

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Types of venture capital There are different types of ventures capital that your professional financial advisor may explain to you. There is seed capital that is generally for business starting out new with no products to show. Start up capital is where you have a sample product ready and need money to produce more as a business. As you proceed, there is early stage capital, expansion capital, late stage capital and bridge financing.

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Thank You

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