Venture Capital companies (lend, financing, investments, vs)

[Rapture]

Has anyone ever used one to start up a business? I actually worked for one years ago but my position didn't involve investments. Once they interview you, review your business plan and decide to invest, how do they usually expect to get paid back? Most I've read about work with companies that need very large amounts of money, do they also lend or invest in companies that only need say $200,000 or less?

[chet everett]

Small scale venture capital is often referred to as a "business incubator". There are some success stories, but more tales of disaster. The basic problem is that some firms "die" in the incubator phase and suck up lots of money, while others "graduate" from the incubator phase without ever had to stand on their own, meanshile the "venture capital" people may weigh down the growth on it offspring.

The big "pay back" generally comes from a transfer to IPO/public trading, but with that being such a graveyard some of the "venture capitalists" get actual salaried gigs within the leadership of the companies they are backing -- giant conflict of interest between the guys that are used to flying on Gulfstream Vs and guys who are sweating it out with a whole new business, but hey, even millionairs need to have a job...

Read up about divineInterventures /Flip Filipowski for some classic examples of this mismatch.

[Rapture]

Thanks for the info. and sorry for the delayed response. I was not aware of this and it's not the way I see the companies future. I also have read a little about Angel financing, has anyone tried this and how difficult is it to get? Do the investors expect to be very involved in the day to day operations also?