A study on analysis of venture capital financing

Abstract

An availability of Finance for startups is a new era of business nowadays and has empowered innovation and growth in human’s life. With this business evolution, young entrepreneurs, small startup businesses even followed by small financing companies have started involving themselves for new and unique business ideas with a source of Venture Capital. This Research Paper explores the role of Venture Capital Financing in fostering innovative businesses. The paper provides an overview of the venture capital analysis, highlighting its unique characteristics, importance and differentiates investment strategies from the view point of Investors as well as Investees. It also examines the motivation and factors considered by venture capitalist when evaluating investment opportunities, including scalability, sources, vision, market potential, and technology and management teams. Furthermore, this paper examines the implications of venture capital financing from the point of Investee, Entrepreneurs on growth strategy of start-ups, mentorship, and value addition beyond just the monetary investment as well as contacts building along with strategic guidance. The study analysis the risk and reasons of failure of venture capital financing followed by the challenges faced, including the information being asymmetry, business being very risky and exist strategies. Finally, this paper highlights the importance, preferable fund-raising terms, rounds raised for investment and rounds utilized expectations of investors as well as of investee and the size of venture financing. Overall, this research paper offers valuable insights into significant role of venture capital financing in shaping entrepreneurial strategy and establishing the transformation of innovative and creative ideas into a successful enterprise.