📔How VCs operate
Venture Capital firms typically source their funding from large investment institutions like superannuation funds or banks.
Typical investments are up to a period of 10 years
To compensate for long-term commitment/risk investors expect very high returns on investments
VCs invest in projects with high growth potential or companies which have the ability to quickly generate cash flow
VCs exit investment through company listing on the stock exchange, selling to a trade buyer or a management buyout
Income:
Venture Capitalists receive a return on their investment through fees
Some return through dividends
Largest return through selling their shares in a company (capital gains)
Investment process
Initial review of proposals from a startup
Preliminary screening (pitch)
Negotiating investment (contract)
Approving the investment (equity company, ongoing support, may receive dividends)
Sale (selling equity in the company)
How Venture Capitalists work https://www.aic.co/AIC/Investment/How-does-venture-capital-work.aspx
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