Venture Capital

Venture Capital (VC) groups are investors who, for a percentage of the ownership of your company, will provide financial assistance – either through buying stock in your company, loaning you money or a combination of the two.  Venture Capital groups usually get their Return on Investment (ROI) when the company is sold after a specified time through the sale of the stock they have acquired.

As with any financial decision, you should do your research and deal only with reputable players.  Working with a VC can be complicated and involves many steps prior to their investment in a process called Due Diligence.  A sample Due Diligence checklist can be downloaded for your information.  Each VC group will have their own checklist, but having a broad  knowledge of what paperwork they are looking for is helpful.  VC Groups also hire companies like Praxis to go through your intellectual property, current operations and logistics to verify documentation.  Praxis is also contracted by companies to do their pre-offer evaluation so they can put their best foot forward.

Like any financial group, there is an organization that helps to set the Best Practices in the industry.  One such group is National Venture Capital Association.  They also provide a list of Venture Capital Groups  and some sample documents  that are common in a stock purchase.  We recommend you research these groups to find the one that is the best fit to your needs.