To launch a business, you need funds. But when you don’t have that much money to buy equipments, to hire employees…, and when traditional financing sources like banks don’t want to grant you a loan because your activity is not stable yet, you have no choice to turn to investors.
Investors with venture capital enable, small companies to start by giving them the initial funds. In return, they have a stake in the company and the power to take part to all the decisions of the start up.
Entrepreneurs, can with this help, develop their idea and their company, because someone believes in them.
Investors want a return on investment as soon as possible to then invest in an other business. When the start up gained value, inital investors can sell their stake to another investor for several millions.
It’s a win-win situation for every stakeholders.
This post is very well written, and the subject matter is beneficial for many readers. Great work.