Help your Company Grow
Business development companies provide an excellent means of growth for smaller companies hoping to go from small and private to large and publicly traded. These business development firms are publicly traded on markets such as NASDAQ and NYSE and give a large boost to companies that need investment firepower. The development companies work to pool together investment resources from shareholders and funds in order to make the transition.
Venture Capital Companies
A venture capital business is a business development firm that provides capital to up and coming companies. These up and coming companies are typically operating with high risk and potential for growth. The business development company opens a fund that earns income due to the equity within. These businesses are typically on the brink of a novel idea with potential in fields like technology, computers and software, internet technology and other similar areas. Once initial investments are in place, the business development company typically goes through a growth phase, which generates substantial returns for the company.
Venture capital companies also attract businesses that aren’t large enough to raise the capital on their own within the public market place. They are also typically too small or unproven to secure the capital funds via bank loans or similar financial options. Since venture capital companies are taking on a large risk by investing in smaller companies, they typically retain a large amount of control over ownership shares and important decisions and directions. Venture capital companies account for a large amount of job creation within the economy, with the United States seeing about 2 million new businesses pop every year as a result of venture capital. In fact, some 11 percent of jobs within the private sector are a direct result of business development companies that used venture capital.
Networks Between Public and Private Sector Businesses
These partnerships create networks between public and private sector businesses and implement institutions that allow for continued growth. Venture capital companies deal with smaller companies worth as little as $100 million to as much as $1 billion in financial assets. Their focus is to work with companies that are private but have hopes of becoming publicly traded entities. They have a large staff and proven track record of helping smaller businesses achieve their goals and certain levels of success that they ordinarily would not have had they not made the jump to becoming publicly traded.
Your Company may have Potential
Smaller companies with potential have a lot to gain by doing business with a business development firm, with both sides reaping the benefits due to the partnership. It’s important for these smaller private companies to look into the track record of a development firm that they’re interested in doing business with. Since these companies are publicly traded, information on this is typically readily available in quarterly and annual reports.
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[author ]Anne Harvester is an ardent blogger on social media and marketing. Read more on her site.[/author]