Many of us use the popular WhatsApp service. But few of us thought about that., how exactly in was created. At first, it was a startup., had simple functionality and did not require very large investments for its creation. Now this is a very serious project., which is used by many people around the world. The project has become so successful, that Facebook has invested in its development, eventually becoming its owner. We can give the same example with the social network Instagram., the development of which cost about 30 – 50 one thousand dollars. Now this project brings Facebook incomparably more income.. You can continue listing startups, have grown from promising projects into huge popular services: avito, cyan, whirligig, core, etc.
These and many other projects were implemented through venture capital investments.. I propose to understand this concept.
A venture fund is an investment fund, whose activities are aimed at working with innovative projects and startups (creative endeavors, involving the launch of a fundamentally new product on the market).
The activity of such a financial organization is to ensure a stable inflow of investments at the stage of creating and promoting a project, and making a profit after it reaches payback.
Gotta understand, what investing – always a risky venture. Even the very concept of a venture fund is associated with the English word "venture", which translates as "risky venture". This is precisely the specifics of the work of such companies.. They invest in assets, medium to high risk. At the expense of investments, the fund buys a controlling stake in the enterprise and manages it until it reaches a payback.
The goals of creating a venture fund:
1. Startup developers get the opportunity to show talent and realize their potential, by launching an innovative technology or project.
2. Investors make a profit.
3. The country's economy is growing, saturated with technological and scientific developments.
In other words, a venture fund can be compared to a basket: many investors invest in it, which are then sent to finance an innovative project or startup.
Venture funds are the most affordable and effective opportunity to start many projects.. Large corporations are not able to cover the entire market and provide the dynamics necessary for modern realities, and state structures are too slow and bureaucratic, to effectively manage.
Venture fund operation scheme:
1. Startup team (or an innovative project) applies for funding.
2. The fund team analyzes the economic feasibility of financing this project.
3. Fund participants (investors) invest their funds.
4. The management company contributes its share of the funds.
5. The project is organized and legally supported.
6. Funds are consistently allocated to launch, development and support of the project at different stages.
7. The Fund monitors the implementation of the project, providing support when needed.
8. Exit from the project by selling shares or shares.
In this way, venture funds perform the following functions:
accumulate investors' funds
select and analyze projects for risks, economic and marketing feasibility of investments.
finance and support promising projects at all stages of implementation.
are involved (more often indirectly) in project management.
At first sight, investing in new, unknown projects, proposing the creation of a fundamentally new, looks like a gamble. But at the same time, with the right, competent and professional use of the opportunities of an investment venture fund, you can create a unique project, profitable for creators and investors.