Venture Capital & Buyouts

Today, the term venture capital (“VC”) has become a bit of an oxymoron. Specifically, pre-revenue emerging companies consistently get the cold shoulder, unless these businesses can credibly show that they have developed a “disruptive” technology that without much capital investment, will garner substantial market share that can be monetized in the short term.

Risk capital is hard to come by following the aftermath of 2008. Unless your business is already generating sustainable revenue and income with a solid growth story and a projectable short term liquidity event, VC “tire kicking” will occur, when the wheels fall off the VC will pass.  The solution is to understand where you are in the gestation of the asset, get traction and then if you still need growth capital reach out to the VC world. Your valuation and control of the asset will be that much greater.

Buy-outs and consolidation plays can be tricky. If that is your passion, know the market, and also prior to presenting to a debt or equity player, have accretive targets already lined up. With the right execution plan, you and your investors can get out at a solid multiple. The term sheet with the targets is critical, this will fuel interest if correctly structured and negotiated with debt and equity players.