Raising Entrepreneurial Capital, 2nd Edition

6

Venture Capital

John Vinturella and Suzanne Erickson

Introduction

Businesses that are in a rapid growth phase often find a need for financial assistance well beyond their current resources and networks. Although this is a very positive indicator for a business, the search for outside investment can be extremely challenging. For firms with very high-growth prospects and a high probability of exit through sale of the company or initial public offering (IPO), venture capital may be the answer to a firm’s capital needs. This chapter looks at the world of venture capital. We will look at the structure of the venture capital industry and a typical venture capital partnership. The chapter will examine a term sheet and analyze the reasons for common ...