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How Do Venture Capitalists Do What They Do? - Obramuro Law Firm

How Do Venture Capitalists Do What They Do?

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How Do Venture Capitalists Do What They Do?

by obramuro April 9, 2016

Thanks to the growing popularity of shows like Shark Tank, the general American public is becoming more and more interested in the mystifying and incredible venture capitalists that seem to have more money to spend on risky business ventures than most people have to spend in their lifetime. If you are a business owner, a venture capitalist might be much more than a premise of a show for you; a venture capitalist could very well help your business open and remain thriving.

Venture Capitalists

What is a Venture Capitalist?
A venture capitalist lawyer provides a large chunk of money to early-stage companies who can prove their worth. In exchange for providing so much money, venture capitalists take equity in the companies to maintain a level of control over decision-making, ownership, and value.

What Skills do Venture Capitalists Offer?
Venture capitalists are much more than a pocketful of money. They have a talent for identifying up and coming business ideas that will generate high revenue—and quickly. Since venture capitalists have the ability to identify such potential, they also want a managing role within the companies they support so that the decision-making is guaranteed to roll in the direction they want to see.

How do Venture Capitalists Afford It?

The truth is, venture capitalists aren’t always reaching into their own pockets to help a startup business. Most receive so much money through interest and fees on the capital they have already invested that they can simply re-invest using those profits.

Though the math varies, many venture capitalists charge an annual fee of 2 percent of the investment over a ten year period, and they also receive a portion of the profits through equity and successful exists. That can create millions and millions of dollars every single year to re-invest in the next deserving business.

A business law attorney Tampa understands the complexities of working with venture capital and can help your business thrive using the best investments available.


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