Modern Investment Methods For Business Leaders

People most often get confused between Venture capital, personal equity, and venture debt. A lot of them start seeking funds and become associated with investment bankers or company brokers without actually comprehending what they're searching for or who they're talking to. The three are very much similar yet different in some ways. Let’s understand them in a bit more detail.  

Real estate India
Growth Capital India

Venture Capital: Venture capital firms raise funds by limited partners and commit the money in businesses for a share of the possession. This isn't so disparate than investing money in the stock exchange. You purchase shares and also have a say in how a business is run. As far as India is concerned, Venture capital and private equity investment come primarily from real estate in India. With VCs, it is a private transaction plus they require a substantial quantity of control. They aren't intrigued in running the company on a daily basis.

Private equity: Technically, private equity is any possession stake purchased via a private purchase, including Venture capital and investment in your own company. The private equity investment market has drastically matured in India and has substantially contributed to the growth capital in India.

Venture debt: Venture debt is a financing source that doesn't require an ownership stake in the business. Similar to venture capital, it's for early stage companies which are intrigued in financing expansion. They require a high rate of interest and some control over the business, usually in the shape of covenants. Like personal equity, venture debt tends to invest in more aged businesses. The rate of interest is usually high and guarantees are usually required. Venture debt may be subordinated to bank debt, but may also have a claim on the assets of the business senior to the shareholders. In contrary to their name, investment banks neither commit nor do they lend. They're intrigued in transactions between businesses and initial public offerings.

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