Venture Capital provides the company with an opportunity to expand. This would not have been possible through other methods like bank loans. Bank loans require collateral and there is an obligation to repay the loan. However, in venture capital, the investors themselves are ready to take the risk as they believe in the company’s long-term success. Therefore, venture capital financing is beneficial for start-ups with high initial cost and limited operating history. Besides capital financing, venture capital is also a source of valuable guidance, expertise, and consultation. A member from the venture capital firm is usually appointed to the board of the start-up company. This allows the active involvement of the venture capitalist in the company’s decisions. As venture capitalists have experience in building and expanding start-ups, their expertise and guidance can prove to be beneficial. They can help with building strategies, technical assistance, resources, etc. in order to make a business successful.

Abhijith S

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