What is Venture Capital? Export Information
The subject of venture capital is businesses that have a place in the market and that have a certain production system, capacity and portfolio. In venture capital investment, the capitalist invests in the future of the enterprise that has saved itself in a sense. New production techniques, opening up to new markets, new strategies, new product portfolios can be the subject of venture capital investment.
Venture capital, in its simplest definition, is money invested to finance a new firm. To put it more clearly, having a venture capital business; It is an alternative financing method that provides the necessary financing to turn their ideas into reality to entrepreneurs who want to grow and develop but do not have sufficient investment power or have the idea of starting a good business, the necessary entrepreneurship skills and knowledge, but do not have the capital to start a business. These two definitions emphasize the dimension of venture capital as a financing tool.
What is Venture Capital?
Venture capital has emerged as a different type of capital from the classical capital and production relationship. Entrepreneurs with creative ideas and small or medium-sized businesses may need serious financing for the design, development, production and marketing of products or services. Venture capital is especially involved in business life as a financial solution for these businesses and entrepreneurs.
With venture capital, it is aimed to meet the capital need that may arise during the whole process, from the research and development stage to the marketing and sales stage of an idea or invention whose gap and need is felt in the market. Venture capital is also called venture capital. The main reason for this is whether the relevant products or services to be invested are kept in the market. However, if this risk turns into success, high profit margins and sales volumes can be achieved if the products or services are successful in the market.
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What is private equity venture capital?
Investments that invest in companies and fresh ideas as shares or debt that can be converted into shares with the logic of equity, long-term but with the idea of terminating them after a certain period of time, and that offer management and communication opportunities in addition to financial support to the companies they invest in are called Financial Partnerships. Financial Partnerships come to the fore in providing resources to companies and projects with a bright future in cases where capital market instruments such as public offerings and bond issuance and credit debt cannot be obtained under the required conditions.
Financial Partnership investments are classified by factors such as the size of the investment, the process, the growth rate of the company that receives the investment, and they are called Private Equity or Venture Capital. The difference between Private Equity and Venture Capital may not be so obvious. Especially in some countries, different names may be given to the same type of investments.
The term Private Equity stands out because the shares sold belong to a specific group and are not publicly traded. At the same time, sometimes Venture Capital investments can also be described as a type of Private Equity investment.
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How should venture capital be planned?
As the name suggests, venture capital is a risky investment tool. But most of the time, investors try to strike a balance between risk and reward. However, venture capital is not a loan. The company receiving the support does not make any regular or irregular payments to the venture capital investor. The party making the venture capital investment is considered the partner of the company in the amount of the investment. Thus, the company focuses on achieving high returns with long-term success.
Investors can provide venture capital at different stages of the business process of ventures or businesses. The ways of financing ventures or businesses in venture capital can be listed as follows:
- At the Project Stage: In the financing made at this stage, the business process is still in the idea stage, the business or venture has not yet started operating. The capital offered in financing at this stage is also called core capital.
- In the Initial Stage: This stage is done during the period when the startup idea has not yet been released to the market and the research and development studies of the service or product are carried out. It is the most preferred stage for venture capital investors to invest in a venture or business. The general usage area of venture capital is also for this stage.
- Production and Go-to-Market Stage: At this stage, the business has basically introduced the product or service but needs additional funding for the commercial production or marketing process. At this point, it is aimed to carry out the necessary studies to take place in the market as well as to start or improve the businesses with risk capital.
- In the Market Adoption Stage: At this stage, venture capital is used to provide the funds needed by the companies that offer products or services that have reached a certain market share in the process of going public.
Biggest Venture Capital Firms and Banks
Here are a few examples of the largest venture capital mutual funds:
- 24 REAL ESTATE AND ENTREPRENEURSHIP CAPITAL PORTFÖY YÖNETİMİ A.Ş.
- A1 PORTFOLIO MANAGEMENT INC.
- AK PORTFOY MANAGEMENT INC.
- ALBARAKA PORTFOLIO MANAGEMENT INC.
- ARZ REAL ESTATE AND ENTREPRENEURSHIP CAPITAL PORTFÖY YÖNETİMİ A.Ş.
- ATLAS PORTFOY MANAGEMENT INC.
- AURA PORTFOY MANAGEMENT INC.
- AZİMUT PORTFOLIO MANAGEMENT INC.
- DENİZ PORTFOLIO MANAGEMENT INC.
- HEDEF PORTFOLIO MANAGEMENT INC.
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