NAFTA and Venture Capital

The VC market in North America has played a role in Free Trade. In many cases these two not only co-exist, but complement one another. The North American Free Trade Agreement (NAFTA) has been instrumental in terms of economic growth for North America. Efraim Landa and other venture capitalists need a strong economic platform from which to operate and the NAFTA has been beneficial for helping provide it.

What is NAFTA?

The North American Free Trade Agreement was implemented in January of 1994. It is an agreement between North American countries to eliminate most of the tariffs on trades made between the nations. Following the agreement, the United States, Canada and Mexico began to phase out tariffs. The purpose of the NAFTA was to encourage economic activity between the three North American nations.

Tips for the Venture Capitalist

A venture capitalist is defined as one who invests long-term and relies on a hands-on approach with each of their investments and works actively with entrepreneurial teams that specialize in management so that they can create awesome companies.

Understanding How Venture Capital Works

Anytime someone starts a new business, it takes money to get it up and running. It takes money to rent or purchase office space, equipment, furniture, and supplies. While avenues such as tapping into your personal savings, getting a bank loan or bootstrapping are ways to get money for the startup costs, venture capital is another choice. You will often hear about a private equity firm when it comes to venture capital. There are a few different choices when it comes to choosing a private equity firm. Some are known as passive investors while other is active investors.

The VC Market in Silicon Valley

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When you live and work in Silicon Valley, it’s easy to get caught up in trends billowing from within the echo chamber. Around Silicon Valley, the availability of capital resources helps trends popularize and commercialize faster than anywhere else in the world. From the outside, it seems today’s latest trend is tomorrow’s IPO practically overnight (discounting, conveniently, the 10+ years of persistence required of entrepreneurs along the way).

When it comes to VC-backed exits, Silicon Valley is far ahead of other markets.  Efraim Landa is one of America’s premier venture capitalists and agrees with this statistic.   Silicon Valley is the 800 lb. beast when it comes to exit activity, taking 52% of the largest exits since 2012.  Trailing behind the Valley are New York, Massachusetts, Southern Cal, and Illinois, which collectively account for 28% of the Top 50 exits since 2012.

Types of Stocks

Securing capital is a primary concern for today’s entrepreneur and small businessman. There are many options available such as venture capital or angel investors. These professionals offer the funds the business may need in order to grow or create a new line of products. The primary purpose of these types of capital is to help the business achieve a level of success until it can be traded publicly. Publicly traded stocks can fall into different categories and offer investors different levels of returns. It might be a lot simpler if there was only one kind of stock, but it would not allow for as much versatility either. Even though most companies trade common shares, there are other classes of stocks as well.