What does a venture capital investor look for when making an investment?
As is the case with private equity investors, the ultimate goal of venture capital investors is to create value. However, contrary to private equity, which looks for already established businesses and identifies ways to boost their value, venture capital often deals with businesses that have no track record to speak of. At times venture capital backs concepts or ideas and supports entrepreneurs find and develop their business model in order to reach their goal of high growth and create value. Since the businesses are nascent, venture capital investors will take a disciplined approach to evaluating not only the viability of the business idea, but also the motivation and background of the entrepreneur. Ultimately, venture capitalists look for bright ideas and bright entrepreneurs, with the attribute to see their idea through to success.
