How to Find Reliable Venture Capital Partners through a Placement Agent
Posted on Thursday, July 14th, 2011 at 1:13 am.
One of the decisions a company must consider while fund raising from potential venture capital partners is to look for a good standing placement agent. This is in order for a company not to spend too much of its own time seeking for seed capital, mezzanine capital, or growth capital funding for startups or various business expansions. A company can be better served using a placement agent that has a strong network of seed capital, venture capital and growth capital connections, allowing the company to focus more on their core competencies and other management issues rather than spending so much time seeking for investment partners.
Placement agent acts as an intermediary in the world of fundraising. Agents are sometimes individuals but more often a firm who assist entrepreneurs, private equity groups, or institutional investors who are willing and capable of investing. Their main function is to help connect those who are seeking to raise venture capital, and other various investors who are interested in investing capital into companies who are looking to raise funds.
It is a very challenging task for a placement agent to connect entrepreneurs with venture capital partners. Companies located along Sand Hill Road in Silicon Valley who can raise venture capital, growth equity, or mezzanine debt with reasonable ease will obviously not consider using an agent. But for companies located outside Silicon Valley in areas with less developed venture capital markets, an agent is a very reasonable option.
As companies search for venture capital partners or equity investors, it is important to seek out the partners who will offer favorable terms. Placement agents generally have legal backgrounds with representation from top Silicon Valley law firms and provide valuable legal counseling. Agents work to seek investors who have strong value propositions along with their financial investment through their experiences, expertise, and network of contacts.
GrowConnect offers a range of private placement services to entrepreneurs as well as private equity groups. With a vast network of equity investors and high caliber legal representation GrowConnect will work to raise capital for your offering.
Female Entrepreneurship and Venture Capital Investment
Posted on Saturday, June 18th, 2011 at 2:49 am.
The world has changed. Women are getting more absorbingly occupied in the world of entrepreneurship today. This is because many women tend to invest more conservatively than most men when talking about financial matters whether within the four walls of their home or in the real world outside. Furthermore, women were always seen as being domestic, pious, moral, pure, gentle, kind, graceful, and beautiful. If a woman was placed in a different situation, she would always know how to compose herself even in a toughest situation.
In the past century, women have always been present in the work force as business managers or even business owners but not quite in significant numbers. However, in the recent years, the concurrence of legal, educational, demographic, and social development have begun to move women into the prevailing direction of corporate management and entrepreneurship as well as in venture capital investing. Accomplishing their dreams way up to the corporate ladder while fighting gender discrimination is a common life thread mostly seen among some of the most successful and famous women in business. And these women we see as powerhouses in the business came from humble upbringing.
Women also run companies differently compared to men not just in the lifestyle business but in employing people. This is because women are more deeply perceptive and can better suppress negative emotions. They are more likely to display good leadership because of their higher emotional intelligence. Women and men may have similar career aspirations, advancement strategies, and barriers to success but they have differences in the types of barriers and how they balance their work or life responsibilities.
The leading women of entrepreneurship today envisioned to make a difference to the global awareness and culture of entrepreneurial women in business. Amanda Steinberg, a 33 year old female venture capital investor, was able to raise venture capital worth millions at such a very young age. She started working as a Web Programmer more than 10 years ago and she saw how many unstable startups were raising millions. She knew she would not stay forever running a software company’s satellite office, so she started to look for a big and fundable idea. She quoted, “If so many people were successfully raising money for mediocre ideas, I figured I stood a good chance with a great idea. I at least had to try”.
Monica Dodi, CoFounder and Managing Director of The Women’s Venture Capital Fund, is an international, multilingual new media entrepreneur with a proven track record in creating, launching and building highly successful global brands. She founded several highly successful companies and even negotiated numerous licensing deals with Fortune 500 companies. She co-founded MTV Europe that later became the fastest channel in the continent. She joined Walt Disney Europe, and ventured a paper product business with a Disney license which was later acquired by American Greetings. She helped Warner Bros launched television channels worldwide and was recruited by Brandon Tartikoff as CEO, to launch an AOL’s Entertainment Asylum which became the fastest growing entertainment destination on the web. Monica has worked with other several venture capital partners and she is always on the cutting edge of the new media landscape, and has been working with new ventures in virtual worlds, music technologies, and social media as an advisor and angel investor.
As women are getting more vivid in the entrepreneurship world, financial institutions are now specializing in woman financing to allow interventions in terms of small business developments and sustainability. Woman financing is an innovative creation that empowers women to develop businesses whether they have been in a business for a long time or just starting out in business. It helps women who are first time small business owners or who have owned several businesses but need to get their projects off the ground. They also offer financial programs specifically tailored for female entrepreneurs who have no business experience or business lines of credit but these women have the courage and strong skills that are necessary for business innovations.
Why Raise Venture Capital amid Unstable Economic Situation?
Posted on Friday, May 6th, 2011 at 11:19 pm.
As we know, venture capital lies on the opportunity of investing. It involves high risks and it can be very time consuming. However, if the ventured business grows it can reap a very huge reward. A few years ago some venture capital partners are holding back their expenditures amid the financial downturn, according to some financial blogs. This financial crisis made it harder for investors to get funding for startup businesses or business expansion but those who prove themselves during this period of financial crisis will be better positioned to flourish when the economy recovers.
According to the IMF’s World Economic Outlook report last January 2010, they forecasted 3.9% GDP from the said year and projected 4.3% GDP for this year. Some people thought that the global economy recovered faster than what was planned, but some believed that the recovery has been slower than they had hoped. According to IMF chief economist Olivier Blanchard, a global recession has been avoided, so that a gradual recovery of world economy is present. But some developing countries have restored faster after the global crisis particularly in Asia such as China and India, and in Latin America such as Mexico and Brazil. Despite this unstable economic situation, the United States has always been a dominant force in fostering world innovation.
With the economy turning down and some educational concerns remain an issue; the United States has been desperately conscious of a changing world. Transforming ideas into marketable and lucrative products is the greatest skill of venture capital that was challenged by the globalization and technology breakdown in the past years. The venture capital community was more pressured to continue superior performance and maintain competitive edge as the global standards are arising. Since taking his office, President Obama has taken historic steps to lay the foundation for the innovation economy of the future.
The United States strongly focuses on innovation. The Obama Innovation Strategy builds on well over $100 billion of Recovery Act funds that support innovation, additional support for education, infrastructure and others in the Recovery Act and the President’s Budget, and novel regulatory and executive order initiatives according to the White House website.
This is an exceptional time for the venture capital community, and together as a whole, the industry must address venture investments and methods to make certain to have a continued growth direction for promising young or startup companies. The economic situation today creates ideal opportunities for angel investors and venture capitalists. The importance of venture capital lies not only in providing money for this innovation but also ancillary services such as selecting good firms, mentoring entrepreneurs, hiring executives, formulating strategies, and professionalizing companies thus, providing job opportunities for the Americans as well.
How to Re-Apply for Startup Loans or Seed Capital after your Bank Declined
Posted on Tuesday, April 5th, 2011 at 11:46 pm.
So your bank declined after complying with all the requirements necessary in applying for a startup loan? It is very discouraging when after all the efforts you have invested in and the time consumed of securing all the documents needed, you were still rejected by your bank. This loan rejection could affect your business lines of credit for future business loans. But do not take it personally because there are always challenges when going through the business loans application process. Try to stay calm and find out why your application was not approved.
It is imperative to know and understand why your loan application was not approved by your bank. Most of these financial institutions would not go through the details as to why your application was declined because they are afraid they might be offending you, but knowing the reasons why can be crucial to your business success and it can be very helpful in your subsequent business loan applications. You may ask your lending officer politely and tell him that you understood why they would not be able to help you; however, you need to know the reasons of their disapproval in preparation for your next loan application.
After being turned down from your local bank, stay calm and do not lose your hope. The rejection of your loan application may only reflect the financial health situation of the bank, perhaps the bank is not really in good financial shape and are only offering loans to their best valued customers. But it does not mean that you are not one of their best valued customers, perhaps these clients are their loyal customers who have been in business with them for such a very long time. If you have been their client for such a very long time as well, perhaps you were the last one to apply.
There are few best options left for you in acquiring startup loans or seed capital for your startup business. Your best solution is to look for a financial firm that offers unsecured business loans which do not demand for many requirements unlike your local conventional bank. It is best to partner with this type of unsecured business financing firm who understands your financial needs and helps you obtain unsecured lines of credit.
There are angel investors network as well that can provide you seed capital that eliminates unnecessary applications which could also have resulted in disapproving your previous loan application. This network of investors may help you analyze your business plan, offer essential coaching for entrepreneurs seeking to raise venture capital, and will work with you to accomplish your goals. Partnering with angel investors for your startup business enables your business to succeed and they will continue to help your existing business for future expansion.
There are several financial institutions other than banks where you can obtain business funding for your startup business or business expansion. If you are not familiar in your area, you may search on the internet and apply through online, or you may call their hotline numbers and they would be happy to assist you with your financial needs.
A Look at the World’s Economic Situation Today
Posted on Thursday, March 24th, 2011 at 1:21 am.
Today’s economic situation creates ideal opportunities for angel investors and venture capitalists. It was reported that the world’s economy today may appear to be improving statistically but many believe that the global economic conditions are only getting worse. When a high intensity earthquake and ensuing tsunami devastated Japan last Friday – March 11, 2011, the world was shocked and in great turmoil.
Japan, as one of the richest countries of the world is currently suffering from nuclear crisis that may influence the global economy, and may affect the health condition of the nation and its neighboring countries. It was the worst earthquake experience that this country ever had, and the worst calamity that ever happened to this country. Japan gets more than a quarter of their power from nuclear energy. The country has several nuclear reactors and became the third largest nuclear power user in the world providing 34.5% of its electricity. So many countries depend on nuclear power. But what happened in Japan recently made safety officials seek desperately on how to avert catastrophe because this nuclear meltdown is enough to impact human health.
Prior to the catastrophic event in Japan, several countries experience tragic situations as the strong forces of nature hit these countries while some experience chaos and wasted so many lives due to civil wars because of political ill-power or political dynasty. Following are just few of the major disasters encountered by some countries today, creating a humongous effect in their economies.
- A strong earthquake wreaked havoc in New Zealand last month and killed so many people while hundreds are still missing and left damages that caused billions of dollars.
- The wettest season ever in Australia happened earlier this year where one of its biggest cities and some towns were ravaged by heavy floods, killed few people but affecting thousands of families and establishments that cost billions of dollars in its damages.
- In south-eastern Brazil as well, they experienced the worst natural disaster after several decades. More than 500 people were known to have died in heavy floods and damaged a huge amount of money in their properties.
- Egypt encountered its first real international crisis and the biggest disaster since the Iranian revolution that happened three decades ago, pushing the Egyptian regime out of power. This also caused several civilian lives and affected a lot of foreign workers in the country.
- The people power started by the Egyptians subsequently brought tumultuous revolutions by Libyan and Bahraini people, still with the aim of pushing their leaders out of power due to political dynasty or regime. These countries are major producers of oil and employed thousands of foreign workers but they were vastly affected because they have to be sent back to their own countries.
- Saudi Arabia and Qatar are afraid to be the next middle-eastern countries to have possible signs of hostilities. According to some economists, if this would ever happen this could be the worst catastrophe that would eminently disturb the global economy.
To raise venture capital is one of the solutions to economic recovery today. Angel investor networks are very positive of seeing their money grow by investing in start-up businesses with potential, or in some business establishments that are still in the recovery phase after the catastrophe. Those who have good business lines of credits are very much capable of acquiring these unsecured business loans quickly. Entrepreneurs and investors can easily connect with each other no matter which part of the world they are because of the advancement of technology.
Hiring a Placement Agent to Market Mezzanine Capital and Growth Equity Investors
Posted on Friday, March 18th, 2011 at 12:15 am.
A placement agent is a financial firm who act as an intermediary in the world of fundraising. Sometimes it is an individual but more often a firm, who assists entrepreneurs, private companies, or institutional investors who are willing and capable of investing a private equity fund. Basically, they match cash-hungry funds with cash-rich investors. They are often structured as groups within huge investment banking firms such as Credit Suisse Private Fund Group and UBS Investment Bank, or as separate boutique investment banks such as MVision Private Equity Advisers and Campbell Lutyens.
In the context of private equity, a placement agent serves several functions for a company such as raise mezzanine capital or venture capital, as well as raise investor commitments to new private equity funds. The market is very competitive especially with the advancement of media and technology, and the need of a placement agent is now certainly arising in this new economic environment. They are crucial to fundraising for emerging markets of private equity funds.
A company usually hires a placement agent in order not to spend too much of its own time seeking for mezzanine capital or growth equity investors. Sometimes the lender also commissions an agent so that the fund partners can aim attention at management issues rather than focusing on how to raise venture capital. Mounir Guen, chief executive of MVision says, “A placement agent is a necessity.” Why? “Because if the job is done well it brings a level of sophistication and experience to the fundraising process.” This is because financial institutions have become more crucial and sophisticated in evaluating potential investments.
In the past, these agents were hired to introduce private equity funds to the investors or to what they termed as limited partners (LP), and simply congratulated after a job well done. But today, they are highly valued advisors who understand and know their limited partners and the market’s appetite for different approaches. They also advise and assist fund managers and help develop marketing strategies. Their critical responsibility is constantly trying to satisfy their limited partners and value their judgment in order to establish long term and deep relationship.
Placement agents can bring a myriad of relationships with growth equity investors, mezzanine capital firms, or venture capitalists. They can cherry-pick investors that are likely to come into a particular fund, increasing efficiency and minimizing risk in the fundraising project, according to James Coleman who joined Deloitte LLP after UBS Investment Bank, two of the globally known financial services firms. They can also advise some existing owners of private equity assets on secondary market sales of their interests.
Placement agents are mostly compensated through fees ranging from 1 percent to 3 percent by the companies or individuals who raise capitals. Sometimes their fees and terms of engagement would extremely vary depending on the length of time to execute the fund and based on the amount of money raised.