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Angelical ventures

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  1. Introduction
  2. Types of venture capitalists
    1. The formal venture capital
    2. Business Angels
  3. Business Angels
    1. Their intervention
    2. Environment
  4. The investment process
    1. Business plan
    2. The management team
    3. Failure of the project
    4. Transfer to new investors
    5. Transfer to the shareholders
    6. Transfer to another company
    7. Initial public offering
  5. Conclusion

Venture capital is an alternative lending mechanism available to business conglomerates across the world. It is a viable option when bank credit is difficult to obtain because of the risk involved in the nature of the business or novelty in the concept of the business as a whole.

The investors, known as venture capitalists or "business angels" fund a project during its commencement, development and transmission stage.

Ever since venture capitalists emerged as a source of finance in the United States in the late 1970s, many companies have benefited from them. The numerous start up firms in the Silicon Valley owe their existence and survival to them. These are generally companies with innovative concepts, which were not approved for funding by financial institutions.

[...] Will they have the skills or specific techniques? Will they have a sharp vision about market trends? Do they prefer healthy competition? These are some questions that need serious consideration. Complementing factor: The integration and the way in which various departments function together should be ascertained. Motivation: One needs to know the constraints and limitations of the other party. The ability to handle tough situations and mange conflicts should be analyzed. The "Feeling": The Business Angel will have to work with a team. [...]

[...] The terms of the output must be defined in the shareholders' agreement, including specifying a redemption fee over the shareholders - Failure of the project The business angel can subscribe for preference shares rather than common shares. In case of liquidation of the company, these actions may provide a refund priority. It is also possible to choose indirect means of accessing capital. This is possible in the case of bonds convertible into shares (OCA) or bonds redeemable in shares (NRS). [...]

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