Venture capitalists are professional investors who commit money, time and energy to help your business succeed.
Characteristics Of Venture Capitalists
Typical Investments By Venture Capitalists
Sources Of Venture Capital Funds
Government Venture Funds
More About Venture Capitalists
Characteristics Of Venture Capitalists
- Unlike angels, venture capitalists take an active role in the running of your business. The ability of venture capitalists to bring both money and experience sets them aside from other investors.
- Venture capitalists are in it for profit. By helping you to achieve success, the value of their investment goes up. The higher they can drive the value, the more money they make.
- To achieve this, venture capitalists:
- look for businesses with developed products or services
- actively control how the business is being run
- provide management and technical expertise
- bring in business contacts and joint venture partners
- They typically invest in high return sectors such as technology, genetic engineering, biotechnology and medicine.
- They generally look for companies with the potential to become multi-million dollar companies in 5 - 7 years.
back to top
Typical Investments By Venture Capitalists
- Venture capitalists are usually prepared to buy a 40-50% stake in your business. A typical investment lasts between 2 - 5 years.
- They expect a return on their investment of at least 30% for every year invested.
- When venture capitalists cash out, they take a big slice of the profits with them.
- They exit when the business is listed on the stock exchange or when they receive an attractive offer for their shares.
back to top
Sources Of Venture Capital Funds
- The Singapore Government has been encouraging venture capital investments and activities since the 1990s. Today, there are a wide variety of venture funds available.
- It is important to find the right investor, one with an interest in your industry. For instance, BioVeda Capital is only interested in investing in the biotechnology or healthcare businesses.
Matchmakers
- Although you can go directly to venture capitalists for funding, it is easier to use matchmaking channels to identify a venture capitalist that suits your needs.
Venture Capitalists In Singapore
back to top
Government Venture Capital Funds
- The Government, through its agencies, sets up venture capital funds to invest in businesses.
- These funds invest directly in start-ups. They also invest through venture capitalists.
- Bio*One Capital
Bio*One Capital, investment arm of EDB, invests in start-ups in the bio-medical sector.