Venture capitalists preference: A seed-funding stage or at an Expansion stage??

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	Venture capitalists preference: A seed-funding stage or at an Expansion stage?? Created by : Anamika Roy , Freelancer, IT Services \| 09 21 2010 09:42:14 +0000 Industry : Hedge Funds/VCs/Private EquityFunctional Area : VC funding(Entrepreneurship) Keywords : vc's funding venture capitalists startup funding seed funding expansion stage funding Activity: 420 views; last activity : 10 08 2010 16:22:48 +0000 The venture capital community has an image problem. That's right. Most people think venture capital is just for high-tech startups, but it turns out that way of thinking is so very last century. But investments are taking a strange route today and and its difficult to predict what VC's prefer......A seed funding stage or funding at an expansion stage?? share your views ppl....

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Seed funding stage

Funding at expansion stage

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Top Argument

I think VC's prefer seed funding stage more than funding at the expansion stage, if one has a brilliant idea and it has the potential to grow big, then why not invest from the start than investing in the middle, the trust, the relationship will be more stronger if someone is associated from the beginning than joining in the middle when things are going good. We need investors who take risk, without risk today one is not safe even outside their home. So, VC's prefer to invest from the beginning, at the seed funding stage.

By Veena Gupta, Analyst, Blackstone Group 09 21 2010 10:08:17 +0000

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I think VC's today prefer funding at an expansion stage rather than at the initial stage, a company which is already doing good and has the potential to grow better is what they are focussing on and after recession the VC's are totally playing safe..even the investors in these VC firms want something which is a safe investment option than the risk tag which comes with every other startup.

By Anamika Roy , Freelancer, IT Services 09 21 2010 09:42:14 +0000

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Arguments in: "Venture capitalists preference: A seed-funding stage or at an Expansion stage??"


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Support "Seed funding stage" edit in rich text ... Submit Cancel Saving ... 0 0 vc refers to capital investment in new business that has high growth prospect and offer high element of risk & return in investment , if project are viable than investment r made in different stages which include both mentioned stages of investment. By ashesh anand, Consultant, THE MASTER'S \| 10 08 2010 16:22:48 +0000 Edit \| Delete Support \| Oppose 0 0 People entering into a business at the expansion stage can only be called as investors and not venture capitalists. By s.baalu , Consultant, XYZ LTD \| 10 08 2010 12:47:14 +0000 Edit \| Delete Support \| Oppose 0 0 I agree with the views. If there is no optimum level of risk bearing in VC, there is no charm in business. Business is risk bearing up to some extent. Thanks Ms. Veena. By NATTERAJA R. ARIKRISHNAN, GM-Projects, Bentec Electricals & Electronics Pvt. Ltd \| 10 01 2010 18:37:23 +0000 Edit \| Delete Support \| Oppose 0 0 i think seed funding stage.it helps in developing the base not the floors. By Mukut Kumar, Freelancer, Steel \| 09 22 2010 17:28:46 +0000 Edit \| Delete Support \| Oppose 0 0 because at starting stage when bankers and other institutions dont want to help venture due to high risk then is is the only reliable source of fund available and it comes as share capital part so business do now worry about to pay it and there is no burden of interest as well By manish kumar tripathi, Marketing Manager, Bollywood Blog Magazine \| 09 22 2010 09:10:29 +0000 Edit \| Delete Support \| Oppose 0 0 i agree with Veena. VC must go in seed funding, funding at expansion stage can be available from any source based on performance. By Mohammad Bakhsh, Project Leader/Managing Consultant, Freelancer \| 09 22 2010 06:58:01 +0000 Edit \| Delete Support \| Oppose 0 0 Well, amongst the contributors, apparently Veena is the one in funding business.. I look at her as an expert and support her argument. One important factor VCs look for is scalability. Either the promoter of the idea should aim to scale his activity up or the VC himself/herself will look for introducing scalability into the project. When such being the case, how does it matter whether VCs fund at seeding stage or at expansion stage? By expansion, we need not assume that the venture already has acquired a certain level of consolidation and growth. It could be that a venture has been on for the last ten years, say at an industrial shed in Bangalore and the promoter now wants to build a brand and expand... I really don't see any need for the VC to refuse to fund this unit, citing the fact that they do not prefer funding expansion projects... Any funding proposal has to be appraised on its merits..In most cases, the promoter may not present the project properly..There is nothing wrong if the VC becomes proactive and assesses the prospects independently By SR Sham Sunder, CEO/MD/Director Technoaid \| 09 22 2010 01:48:13 +0000 Edit \| Delete Support \| Oppose 0 0 VENTURE COMES FROM THE WORD... ADVENTURE ! How can U have an Adventure IF UR NOT IN IT FROM THE START ? No Risk = No Gain Low Risk = Low Gain More Risk = More GAIN If the Idea is terrific & is a potential winner, there is no point in joining at the Expansion stage... THE RETURNS WILL BE LOWER, as the Company requiring Financial Investment knows the project is a Winner, So their Terms & ROI will be lower. By Naushad H.L., Creative Director, MAD COMMUNICATION \| 09 21 2010 10:33:52 +0000 Edit \| Delete Support \| Oppose 0 0 venture capitalist prefer seed-funding stage rather than expansion stage because venture itself built for supporting to those have relevant idea but don't have fund to afford to make practical than to be in pen and paper By Binapani Rout, MBA/PGDM student, Regional College Of Management, Bhubaneswar \| 09 21 2010 10:00:24 +0000 Edit \| Delete Support \| Oppose	Support "Funding at expansion stage" edit in rich text ... Submit Cancel Saving ... 0 0 Veena unfortunately I dont agree with you. I am of the opnion that VC's like to fund at the expansion stage since it becomes clear the company will do well so the funds are safe. By Rathin Deb, Freelance Retail Consultant \| 09 22 2010 04:28:13 +0000 Edit \| Delete Support \| Oppose 0 0 Basically, VC means venturing in Investment. It does not say that it need to be in "seeding fund stage"only. Investor- main- interest, is to get his ROI. Now, when you look at the two secenario, the Risk involved is Latent(hidden) in Seeding stage whereas, in the Expansion stage it is trivial(Obvious). By the history, the investor quickly go over the Risk involved and ascertain the benefits that he can acrue. But, it is not so easy to determine the risk in seeding stage. So, when the option is given to the investor, it is easy for him to assess the Credibility & terms of return in the expansion stage. By KALIYAMOORTHY , Oil & Gas Area Coordinator, Undisclosed \| 09 21 2010 15:11:13 +0000 Edit \| Delete Support \| Oppose 0 0 Yes Anmika I agree with you. The VC's are not taking any risk and fundings will preferably start at the expansion stage. i think at the start up stage the vc ;s will not prefer unless thevalue reduction is done to a great extent which is not acceptable to the promoters. At the expansion stage though the returns will be lesser but safe hence they play safe. By Rathin Deb, Freelance Retail Consultant \| 09 21 2010 12:18:55 +0000 Edit \| Delete Support \| Oppose
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