Financial Management for Small Business

Financial Management for Small Business

Financial Management for Small Business
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Q1.
Formal venture capital funds are provided through a limited partnership were the managing partners invest on behalf of the limited partners (Carter. S., Jones-Evans. D. 2006). A business angel usually fits the profile of a well-educated, wealthy individually who has skills and experience working with start-up business ventures, which lets them add a great deal of expertise to the start-up or growing businesses using a more hands on approach in a market they are familiar with (Macht, S. A. and Robinson, J. 2009). Corporate venture capitalists involve corporations investing on behalf of their shareholders, for financial and/or strategic gains (Denis, D. J. 2004).
Informal venture capitalists have established themselves as the primary source of external equity capital for new businesses (Feeney, et al. 1999). Business angels typically will invest sums of around £10,000 to £250,000 primarily and the average investment is £25,000 to £30,000 (Arnold. G. 2008). Through the joining together of business angels, investment syndicates are created allowing the sums invested to be relatively larger (Carter. S., Jones-Evans. D. 2006). On average they will invest for 5-8 years (Feeney, L., Haines, G. H. Jr. and Riding, A. L. 1999).
Formal Venture Capitalists consist of specialist financial companies. These companies have a very detailed selection process and concentrate on fairly risky investments (Carter. S., Jones-Evans. D. 2006). Venture capital funding has an average financial investment of £1 million to £2 million. The smallest investment is usually around £100,000 (Carter. S., Jones-Evans. D. 2006). In addition to providing funding, venture capitalists can add a variety of other inputs, such as operating services, networks, and moral support (Fried, V. H. and Hisrich, R. D. 1995). Venture capitalists invest on average 5-7 years and they aren’t usually

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