Resources for Venture Capital Financing
This information is provided for general informational purposes only and should not be relied upon as legal interpretations by the Office, shall not supersede any part of the Florida Statutes or Florida Administrative Code, and does not constitute legal or financial advice. The Office does not endorse any third-party or guarantee the accuracy of any third-party information linked to or referenced herein.
Venture capital is a source of investment financing from private firms, funds, or individual investors who seek to develop and grow small businesses. Venture capital investors and firms typically seek to invest in innovative and emerging companies that are operational and have high growth potential.
Venture capital investment can serve as an alternative for companies unable to obtain traditional business loans. However, venture capital investors usually require an exit strategy, so this option may only be suitable for companies that plan to go public or sell the company.
Venture capital investors typically make equity investments and often take an active role through mentoring or by occupying a seat on the company’s board of directors. Venture capital investments are usually long-term, averaging 10-12 years.
Venture capital investors usually look for companies with the potential for growth, scalability, and expansion and want to see companies they invest in make an exit through an initial public offering (IPO), a merger with another company, or through an acquisition of the company.
When meeting with venture capital investors, a company will likely need to be able to do the following: demonstrate its product or service and illustrate the market need with research and data; clearly communicate how much money it needs and how the money will be used; and share organized and professional business plans, financial statements, pitch decks and projections. Companies should also include an exit strategy for their investors.
Business acceleration and incubation programs and other entrepreneurial support organizations may have connections to venture capital investor networks or social networks. Conferences or events that showcase a particular industry, market, or location may be opportunities for venture capital investor networking. Research venture capital investor groups that correspond to the company’s industry, product, location, or business stage online.