Venture Capital Isn't For Every Small Business Owner
Written by Jenna Weiner
Taking in venture capital is appealing to some small business owners, but other don't like the strings that come with it.
Many growing small businesses turn to venture capital investment to grow their company once it has hatched beyond the startup stages. But the consequences of venture capital investment mean that the process isn't right for every small business owner, according to the Wall Street Journal.
The Journal reports that venture capital is generally a significant amount of money - many millions of dollars doled out over years, and is generally only given to companies that have already established themselves.
Because the amount of money is so large, when venture capitalists invest in a company they also expect to take a very active role in the company's operations, which may be news for small business owners. The paper says investors may decide to put their own people in leadership roles to give them control of their investment - a level of authority that some may not enjoy.
Other small business owners told the paper that they didn't mind the outside oversight because the cash investment helped them bring their companies to the next level.
For companies still seeking early-stage or seed funding, a traditional bank loan or angel investment may be more attainable. Despite the recession, the Center for Venture Research says that angel investors increased the amount of money they pumped into emerging businesses last year - funding more than 57,000 small business projects.
Have Friends Who Might Like This Article?
Share this on Twitter
Let them know on LinkedIn
Ready to Learn More? We Think You Might Like These Articles:
About Our News for Small Businesses
If you liked this small business news article, you can find other breaking news for entrepreneurs on our site. We cover important news stories for entrepreneurs. In addition to breaking news for entrepreneurs, we also have tons of how-to articles that cover topics like getting business loans, hiring and firing employees, getting publicity and much more.