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This 1 page Document was uploaded by an elite notetaker on Sunday December 20, 2015. The Document belongs to a course at a university taught by a professor in Fall. Since its upload, it has received 8 views.
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Date Created: 12/20/15
Returns of Investment At some point in their operation, businesses will require assistance from outside sources for capital. Even those that are still starting may find it necessary to look for investors who can provide them with financial assistance to make their business idea come to life. There are many types of investors. Some of them are specific about the kind of businesses they should provide funds with while others do not pay much attention on the stage of the business they are funding just as long as they know there is a potential to earn a decent amount of return to their investment. For investors, the chances of earning a return of profit is good because the recipient often guarantees a minimum return protected by the existing assets of the company. Although there are some potential advantages associated with this type of activity in investing, choosing to be a venture capital investor may present some risks and challenges. Companies that have initially showed promise may instead fail, resulting to at least a partial loss of the invested capital. Aside from that, venture capital investors may need to wait for years before they start earning a return on their investment, an element that may be discomfiting for those investors who look for quicker turnarounds on their investments. For this reason, an investor who considers this type of opportunity has to ensure they can afford to absorb some loss and be prepared to work without receiving real returns for extended time periods. Both venture capitalists and angel investors are excellent source of funding and many businesses have been grateful for their existence as it provides them with an easier way of getting the funds they need besides approaching banks and other lending institutions that have rigid requirements. But in order for a business to convince these investors to supply them with necessary funds, they should present them with an impressive and attractive business plan.
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