Venture Capital Fund Managers
Venture Capital Fund is a form of private equity investment but it is not entirely the same.
While private equity investments favor large, established companies that need an infusion of fresh capital or whose owners wish to transfer some their shares, venture capital funds are aimed at emerging businesses or startups who are seeking investors to help them get off the ground.
Typically, these smaller and newer companies are perceived to have high growth potential but are relatively too small and often lack the cash flow and profitability required for a loan from banks or to raise capital from public markets and other conventional funding institutions. This is where venture capital comes in.
Despite the worldwide economic disruption triggered by the coronavirus pandemic, studies show that venture capital funding in the United States as of the third quarter of 2020 amounted to USD 12.74-Billion in web based and e-commerce industries alone. Other sectors that continue to pique the most interest among venture capital investors are the healthcare, mobile and telecommunications, and software industries.
Although investing in startups is widely considered a high-risk wager that could either boom or bust, venture capital fund managers are attracted by the upside of a successful investment. Picking a winner promises to translate into massive returns for their investors as the end goal is to successfully grow the new company for an eventual initial public offering (IPO).
Moreover, since they are financing fledgling businesses with limited history or experience, VC fund managers are also likely to demand a stake in shaping the management and operations of the startup business they are financing.
Emerging managers could benefit from the strategic guidance and counsel of an experienced law firm like Veritas Global to can help them navigate the complex legal and economic environments that surround venture capital.
Empowering companies that fuel innovation
Over the last three decades, it has been a widely held belief among economists, business leaders, and policy-makers that the rapid development of technological innovation has been driven for the most part by the venture capital industry.
While venture capital investors around the globe have been funding startups from various industries, the most active investments reported in recent years have been in the cutting-edge fields of: (1) internet and software services; (2) industrial manufacturing; (3) healthcare and biotechnology; (4) space exploration; and, (5) security defense.
Because of its high-risk, high-returns nature, venture capital fund management is not for the faint of heart. The most successful investors are usually those who can temper boldness with a measure of skepticism, are exceptionally business savvy, and have the patience to do fastidious due diligence in examining the investment opportunities that come their way.
Moreover, venture capital is not only about financial intermediation. It is also about providing portfolio companies with expert advice in navigating the legal, commercial, and cultural environments in which they operate.
Because VCs frequently invest in sectors that they feel passionate about, it is not unusual for investors to use their knowledge of these industries and markets to mentor young entrepreneurs and share their network of contacts, suppliers and customers.
This non-financial influence of venture capitalist son corporate management, strategy, and performance elevates their interest from being mere “funders” to “company builders” who are also investing in the professionalization and commercialization of the portfolio company.
In the long run, venture capitalists also play an important role in the process of the company going public.
Make better decisions with business-oriented legal advice
We at Veritas Global have a strongtrack record in working with funds and institutional investors around the world, representing sponsors in closing funds with as much as USD $3-Billion in committed capital.
As we have been General Partner’s counsel in successful private investment funds and advised the board of portfolio companies across the globe, our team is ready and uniquely capable to provide business-oriented legal advice to VC fund managers on fund formation and liquidation, cross-border investment, due diligence, regulatory compliance, fund-raising and investment strategies, and other relevant dimensions of portfolio company management.
With our proven track record in working with General Partner and Limited Partner clients around the world, Veritas Global delivers not only legal and regulatory compliance, but also valuable insights into real-world market trends. We advise on transactions of all types, including fund formations, primary investments, co-investments, and secondary transactions.
Veritas Global takes a long-term view of your investment goals and actively collaborates with you to gainfully attain them. As your strategic partner, we help you make informed, well-timed, and confident decisions backed by business-oriented legal advice.