9 Things You Should Know About Dealing With Venture-Capital Brokers
You want to buy a new company, expand operations, acquire a business, or raise capital. Youve decided to go for venture capital funding versus a bank loan for a multitude of reasons from the risks involved to the amount you need to carry out your plan.
Do you know as much as youd like about gaining capital? Most people dont. Their expertise is in their business, not in capital funding. Here are ways to protect yourself from vultures, deals you cant afford, and the nightmares of both.
Some quick explanations:
A venture capitalist (VC) is a person, group of people, company, or group of companies with money to invest in your business.
A VC broker represents you (or possibly a VC) and arranges the parties to create a deal. This article is about working with the broker.
Since many brokers are ethical, why such a negative slant? Over two months, two of our consulting clients nearly lost their shirts dealing with brokers. One broker tried to quadruple dip on a VC deal by taking a commission, bringing in another broker (who needed a commission), taking excessive points on...