The Venture Capital Market in the United States
The U.S. has a thriving venture capital market. The market is envied by other counties who seek to model their own systems after it. This is due in part by the way funding is received. American corporations only rely on banks for about 40 percent of their loans for investing in promising start-ups. The other 60 percent comes from private equity loans, which offer less rigid standards and lower rates. This encourages corporations to seek out and support young technology companies, all of which contributes to a growing economy.
The Market in the United States
The market has experienced peaks and dives since the early dot com days nearly 20 years ago. Until last year, the U.S. capital venture market was on a downward spiral. In 2014, however, things took a turn for the better. The market started shaping up as gas prices fell, unemployment rates fell and consumer spending began to increase. As the economy started to recover, it paved the way for a stronger VC market.
One of the reasons for the upswing is the constant invention of unique concepts in the medical and technology fields. We are in an age of instant gratification. We want everything simpler and quicker. High-tech gadgets and apps are all the rage and there is no sign of this trend slowing down. All of the top selling start-ups lately have revolved around making the traditional way of doing things less time. Consider the apps on the market today, the transportation companies emerging and the concept of printable medical devices. The possibilities are endless. With a unique spin, a clever name and a clear organized business plan, there is the potential to make millions, or even billions, of dollars.
Venture Capital Firms Investments
Corporations and groups of investors are taking advantage of this prime time to get involved with young start-ups and offer their guidance to help them get turn their goals and dreams into a reality. Although sometimes risky, these investments have a real opportunity for a huge profit. Now more than ever, venture capitalists are excited about the possibility of being part of the next big thing that will become a household name and make the corporation a huge payoff.
If 2014 is any kind of indicator of the type of deals with will take place in 2015 and beyond. Start-up buyouts hit an all-time high in the last half of 2014, including the sale of WhatsApp to Facebook for a whopping $19 billion. These types of deals are encouraging for start-ups and investors alike.
Matching Start-Ups and Investors
Perhaps the most challenging part of the U.S. venture capital market is pairing the right start-up with the right venture capitalists. There are firms that specialize in this type of pairing. Effi Enterprises, started by Efraim Landa, a 30 year veteran in the industry, is one of the most notable firms. The corporation is led by Landa who is an experienced entrepreneur and venture capitalist. He uses his unique skill set to work with start-ups to make sure they get the funding they need to avoid the pitfalls of failed businesses. He also works with the investors to ensure they obtain the credit they need to invest in these young start-ups to give them the strong start they require to be successful.
What to Expect for the Future of U.S. Venture Capital Market
Some experts view the market as a bubble that is ready to burst at any given time. Others see a bright future for the market, following the trend of investors spending more money on fewer start-ups for a bigger return. Surviving the ever-changing VC market requires flexibility and expectation management. It can certainly be a risky business, but experienced venture capitalists are able to identify innovative ideas that are more likely to succeed with the help of some seed money to get the business up and running.
The most successful start-ups stem from not only the funds from corporate investors, but also their guidance in organizing and managing the business to avoid common mistakes and maximize the profit. Relying on an expert like Efraim Landa is one way to ensure the right pairing and increase the changes of success for both the start-up and the venture capitalist.
Posted on May 26, 2015, in Effi Enterprise, VC Firm, Venture Capital and tagged Effi Enterprises, Efraim Landa, Private Equity, US venture capital, VC Market, venture capital firm. Bookmark the permalink. Leave a comment.