Common Questions about Venture Capital

Getting a business started is no easy matter and it takes a lot of money, effort and time to succeed. There are many ways to secure funding depending on the type of business and its stage of growth. Venture capital funding is only one way a business can get funding, but it has some unique characteristics. Many people are unclear on what venture capital funding is and how it works. Here are some of the most common questions people ask about VC funding.

The State of Venture Capital Markets in Europe

Venture Capital Markets in Europe

While the U.S. venture capital market is showing growth and promise this year, it should also be noted that the European market is at the highest its been in last four years. Venture capitalists are committing to more start-ups and offering more money than ever before. In fact, the increase isn’t just coming from within; even U.S. venture capitalists are increasing their spending on European start-ups. Both scenarios are helping to boost the economy.

Although roughly 3,000 start-ups throughout Europe receive funds from venture capitalists and that number is expected to rise this year at a slow and steady pace, the U.S. market is still significantly higher. Currently, it is Germany, France and the United Kingdom that are dominating the market. Combined, the three powerhouses make up for half of the venture capital deals made throughout all of Europe.

The State of the World Economy

World Economy

The global economy is essentially dependent on the growth of the U.S. It is a force in the world economy because for the first time in 10 years, the country. is experiencing a higher level of economic growth. America has basically been struggling since 2005, with high gas prices, high unemployment rates and consumer who were scared to part with their money. What may play out well for the U.S. is the fact that the country relies very little on exports, when compared to other countries. Yet many countries depend on the success of economic growth in the U.S.

How Does Venture Capital Work?

Every new business endeavor requires money to get started. Whether it is the initial costs of renting an office location or purchasing a space for general business purposes, there are always start-up costs necessary to make any entrepreneur’s dream a reality. With numerous expenses involved in the building of a new business, there are a variety of ways that entrepreneurs may choose to fund their idea.

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.

What kind of return can I expect on a VC investment?

There are many schools of thought about the venture capitalist today. Some call them vultures, others use the term opportunists. No matter what your sentiment, you have to admit that it is certainly a riskier investment than some of the other options. The intent when a VC firm like Effi Enterprises helps fund a business is that it will help ensure that the business has what it needs to become successful and profitable for all parties concerned. There is not a predetermined formula that can help a VC firm know exactly how much they will make in the end. But there are a few clues as to what can be expected in return for the investment.

Recent Acquisitions by Facebook

No doubt when social media is mentioned, Facebook is one of the first things that come to mind. The social media giant did have a rocky IPO, but it looks like this is behind them and they have continued to branch out and add more depth to their mobile platforms. When a venture capitalist like Efraim Landa invests in a company, the hope is that it will be profitable and eventually pay off. Facebook is making it pay off for several venture capitalist investments. They have made several acquisitions over the last year. Here are a few of those acquisitions.

VC Trends in the Far East

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Ninety-one years ago, historian Frederick Jackson Turner told Americans to stop looking West, that the frontiers had been conquered, and beyond San Francisco there was nothing but the vastness of the Pacific Ocean.  The cities of the Far East will be the vanguard of economic growth in the 21st century, and the West will have to run to meet them. Already, Japan has catapulted past most of the world in becoming the premiere industrial force after World War II. 

Venture Capital Market in Norway

 

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Efraim Landa invests venture capital in companies that show great potential of becoming high growth companies. With today’s economic climate, it’s not worth the risk for most venture capitalists to jump into an investing transaction that is not solid. Almost all of Norway’s venture capital comes from international sources outside the country such as Effi Enterprises. The VC industry can vary greatly between regions based on the economic climate and various factors which influence investing firms. When a region shows great potential for substantial growth and profits, the venture capitalist sits up and takes notice to see if it is something worth investing their capital funds in or not. The Nordic region seems to be very integrated and has become very attractive to foreign investors in the venture capital sector. In the last decade, Nordic countries have seen tremendous growth when compared to the rest of Europe.

Venture Capital Market in England

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Making wise and profitable investments are essential for the successful venture capitalist like Efraim Landa.  A VC firm such as Effi Enterprises offers expertise along with financial investments in young companies or entrepreneurs with innovative ideas. Typically these entities have great potential of being very profitable but lack the funding to manage the business or company until it is mature enough to be profitable. The VC firm invests money and knowledge into the emerging company with the understanding that once the company begins to make money and stand on its own they will share in the profits. While it is reasonably risky to be a venture capitalist in today’s economy these are minimized by diversifying investments across many different types of industries. This way, even if one industry fails on an economic level, there are other sectors which are likely to be profitable which evens the playing field.