Venture Capitalists are often called Vulture Capitalists and until you read the book: Confessions of a Venture Capitalist, Inside the high-stakes world of start-up financing by Ruthann Quindlen; well you probably will never understand how they got that slanderous title. In the book Ruthann explains what it was like working in Silicon Valley in a Venture Capital Company prior to the dot com bubble burst.

Many ventures are faced with the challenging task of raising venture capital. The first part of this process is finding the right venture capital firm (VC). While this may seem simple, it isn’t. There are thousands of venture capital firms in the United States alone, and going after the wrong ones is one of the most common reasons why companies fail to raise the capital they need.

The rise of venture leasing and lending has created an opportunity for sophisticated entrepreneurs to gain a competitive advantage. Savvy entrepreneurs are using venture leases and loans to generate millions of dollars for shareholders by leveraging existing venture capital. They have discovered ways to use this flexible financing as a tool to build enterprise value between equity rounds and to leapfrog less sophisticated competitors.

The venture capital industry competes in a volatile marketplace typified by high risk and high reward. Venture firms invest millions of dollars on seasoned executives and entrepreneurs who present great promise of creating significant shareholder value with the identification of the next big idea or innovation that will revolutionize an industry.

Borrowing from banks is every small entrepreneurs nightmare. One gets turned down for bank loans for a variety of reasons, including lack of assets, collateral and business experience. Dont despair, however. There are several common types of alternative sources of capital for setting up a business available to young companies.

Venture capital and ‘angel’ investment seems like an attractive alternative to personal loans – you’re asking opportunity seekers to invest their money in your business in exchange for a share of the profits. While it can cost you more in the long run, it means that you won’t be borrowing money as a loan that needs to be paid back whether your business makes a profit or not.

Recently, several students from the Babson College MBA program called requesting an interview. They were researching the venture debt market and wanted an insiders view of how this segment compares with venture capital. Their questions were thoughtful and I thought the discussion was worth sharing.

photo credit: ronbrinkmann There are lots of articles and books written about the formula for start-up success, but start-up mistakes are much more consistent. These common mistakes will take even the best idea into start-up dead pool. Greed Getting rich quick only happens playing the lottery. If you are starting a company for a quick [...]

As the venture capitalists look at the long-term future of the company, they critically examine the company’s existing or planned products or services and the potential markets for them. Hence, a structured financial planning alone won’t ensure you a venture capital. You need to expand your product line or enter into a new market with additional funds to attract venture firms towards your company.

The unraveling sub-prime mortgage market has spewed its wreckage across a vast cross section of the financial markets. Investors and lenders continue to smart from massive losses on investments and loans tied to this market. As some scramble to assess the implications of the sub-prime meltdown, many investors and lenders have either abandoned higher risk asset classes or are approaching them with great caution.