VC explained
Venture Capital is equity funding provided by outside investors into early stage ventures in return for above average returns. Venture Capitalists explore the synergies between entrepreneurs who need funding, investors who require high investment returns and other connected stakeholders in the VC investment cycle.
The Venture Capital investment cycle includes:
- Finding high-growth entrepreneurial companies to invest in that fits the investment mandate as set out by the funder;
- Making these investments through conducting a thorough due diligence exercise, favourable negotiation and legal closure;
- Aggressively growing these investments through active management and board participation over a three to five year period; and
- Successfully exiting these investments via a realisation event such as an IPO or trade sale of the company, resulting in high returns for the funder.
For more information about VC in South Africa contact SAVCA – the Southern African Venture Capital and Private Equity Association (www.savca.co.za)