Explain The Methods Of Venture Capital Financing?
Some Common Methods of Venture Capital Financing: Equity financing: The venture capital undertaking requires long-term funds but is unable to provide returns in initial stage so equity capital is the best option. Conditional Loan: A conditional loan is repayable in the form of a royalty after the venture is able to generate sales. No interest is paid on such loans. Income note: It is hybrid security; the entrepreneur has to pay both interest and royalty on sales but at substantially low rates. Participating debenture: Such security carries charges in three phases - in the start-up phase, no interest is charged, next stage a low rate of interest up to a particular level of operation is charged, after that, high rate of interest is required to be paid.
