Boston venture capital
Boston is a capital of Commonwealth of Massachusetts, a state in New England region of the northern United States. It is a densely populated city and the largest city in New England. At times, Boston is considered as off the record cultural and economic centre of the New England region. Venture capital is a type of confidential equity capital traditionally provided by professional other than investors to new business.
Colleges and universities situated in Boston have a foremost impact on the city\'s economy. Boston has attracted high tech industries like the computer software and hardware companies and biotechnology companies. The rise in the industries has given an outlet for the venture capitalists. Individuals who provide funds to small companies or who invest in the venture capital funds are known as venture capitalists. In the past few years, with the considerable rise in small enterprises, many financial institutes have set up new firms to provide the venture funds. These companies usually invest in early and growth stage companies, which have significant technological assets and having a successful business plan. The venture capital firms make investment decisions based on three important criteria:
- Team: They consider the skills needed for being world class entrepreneurs. The confidence, operational skills and the history of the founders matters.
- Idea : The proposal is looked up by the investors, before taking any decision
-
Market: The proposal should be suitable to the
market. The investors are willing to invest in the companies which would be
profitable.
Many of the top venture capitalist firms invest in the companies, due to there excellent teams or due to the market attraction. The companies always prefer enterprises with strong management and technical teams having deep field knowledge. An experience in the same field and the ability to develop the business is the key are getting sanctioned the venture capital. Venture capital can also include managerial and technical expertise. Most of the venture capital funds have a fixed life of 10 years. There is an option of an increasing of the term for the companies in search of liquidity. The investing process is usually of three to five years after which the focus is set up on managing the enterprise. The investors in venture funds are generally investment banks, other financial institutions and a group of wealthy investors. This form of raising capital is famous among new enterprises with a limited operating history or those who can\'t raise funds due to debts problems. The only issue for the entrepreneurs is that the investor gets a share of the profit as well as has a say in the company matters. The government has stated using venture capital as a financial tool for development. They have started with small and medium enterprise finance companies, which help the small enterprises. These finances play a significant role in the business start ups of these small and medium enterprises.
Overview
Venture capital acts directly by being a source of job creation, facilitating access to finance for small and growing companies, which otherwise would not qualify for receiving loans in banks, and improving the corporate governance and accounting standards of the companies.
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