What are the disadvantages of using a venture capitalist?

Venture Capitalists raise capital for a business and provide advisory services during the term of their investment. The capital raised may be in the form of debt or equity in the business. A typical venture capital investment is structured so that the venture capitalist gets convertible preferred stock in your company. This stock gives the venture capitalist a preference over the common shareholders in the event of a liquidation or merger. It also gives the VC a say in what direction the company should go.

You need to weigh what's important to you in terms of your company moving forward. If control is a big factor, then a venture capital investment may not be appropriate, and perhaps you need to pursue other investment opportunities. If creating value, however, is most important 鈥?the theory that it is better to own a smaller piece of a larger pie than a whole pie that is not worth much 鈥?then a venture capital investment by the right firm can make a lot of sense.

They will want their money back and more.

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　　Venture Investment 　　Venture Capitalist 　　Venture Capital 　　VC Fund 　　Vanguard Fund 　　Value Investment

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Exit! Anyway thnx for 2 points.

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