| What type of returns do venture capital firms expect to receive from their initial investment?

What type of returns do venture capital firms expect to receive from their initial investment?

justin k asked:


I am starting a company and I am preparing to seek funding from venture capital firms.

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2 Responses to “What type of returns do venture capital firms expect to receive from their initial investment?”

  1. The Advocate on June 2nd, 2009 1:07 am

    Usually they want an out option in 5 years and a very high percentage of what you net up to that point.

  2. loveholio on June 2nd, 2009 11:37 pm

    it all depends upon their objective. they may sink a lot of money into your company with the hopes that your company goes public. if the shares skyrocket, they will make their money at that time.

    or they may help build your company in hopes of a sale or merger to another company. they could cash-out there too.

    otherwise, they will probably accept a modest return on the operations of the business. however, they really want you to be very profitable because it will help their investment tremendously.