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Venture Capital

How Venture Capital Became Famous

Not long ago, pretty much not many people thought about about Venture Capital. Ambitious young people used to look to careers where they could make a lot of money and rise to the top of a hierarchy - something like investment banking, hedge funds, or private equity. The startup world was seen as scruffy and risky.

Todays market many entrepreneurs choose this option to build their base to prove to the world about their growth potential. Microsoft, Oracle and google raised Venture funding before going public. To asset managers, venture capital was a small, risky, and uncertain alternative asset class.

This suspicion was hammered home by the bursting of the dot com bubble: The late 1990s were seen as the big venture capital boom, with internet companies generating huge valuations and returns for VCs (companies like Netscape, Amazon, and Yahoo), but this all came crashing down in 2000 when valuations for tech startups plummeted.

What is Venture Capital?

Let's go right back to basics. The goal of venture capital (also called "VC" or "venture"), like any investment strategy, is to increase the value of invested capital. VCs make returns by investing into lots of early stage startups that have a small chance of being really enormously successful. They're the people that invested in companies like Facebook, Uber, and Airbnb, before they got big. By investing in early-stage companies, VCs drive innovation.

They can invest at various stages of a startup's lifecycle:
Seed Funding

Funding an idea and a team before their business model is proven. Typically no more than £1-2m, but this has been increasing recently.

Series A

Funding to help a proven idea scale and to establish a full product offering. Ranges from £1-50m.

Growth (Series B, C, D etc)

Funding to accelerate a companies growth, enter new markets, improve defensibility, or acquire competitors. Typically larger and larger funding rounds, rising into hundreds of millions.

How they make returns

When VCs invest in a startup, they get some equity in return. For early stage investors, this is typically a 10-30% stake. The investments are recouped within 5-10 years, when portfolio companies are acquired, or go public via an IPO.

Because most startups fail, VCs are looking for a small number of startups to make most of the returns for the fund. That means that they are looking for the companies they invest in to be outrageously successful or die trying - the funding is basically intended to be rocket fuel. Often, one or two companies in a portfolio drive 90% of the returns. This leads to a lot of variability in performance across different VC funds.

XEL Technology

You can be a Venture capital investor and search for great companies to invest. You can start with one thousand dollars as a initial investment. XEL Technology open to listen and willing to accept every good deals for our investors.

Entrepreneurs please apply here with confidence.

Venture capital investors apply here to start your journey here. Clickhere