Ip_5 Essay Example | Topics and Well Written Essays - 500 words

Ip_5 - Essay Example through innovative business ideas and proper implementation of the business ideas at the right place at the right time with the help of the right people. There are lots of ways such as venture capital, growth capital and debt capital, for an entrepreneur to collect money for his business â€Å"Venture capital (VC) is funding invested, or available for investment, in an enterprise that offers the probability of profit along with the possibility of loss.† (Venture Capital, 2007) Venture capital was once known as risk capital. But the name has confused lot of investors and it has been changed as venture capital. There is no guarantee for profit through this type of investment. If the business succeeded in making profit then the investors will also get their share from the profit. If the business makes lose then the investors may also lose their money proportional to the loss incurred to the business. Venture capital investments are made in the form of cash for shares in the invested company. â€Å"Growth capital is a funding that allows a company to accelerate its growth. For new startup companies, growth capital is the second stage of funding after seed money.† (Business Definition for: Growth Capital, 2009) Growth capital investor will normally select an established company for his investments. Compared to venture capital investor, growth capital investor may have his money more safe because of the maturity of the company. The financial abilities and the market presence of these companies will be much more established than a venture capital oriented company. â€Å"Debt capital is the capital, usually money, raised through issuing bonds. Although most of the time the capital raised is money, it could be other goods of value as well. The capital raised must be paid back to those who finance the debt. Both private companies and governments can raise debt capital this way† (What is Debt Capital? 2003) Compared to the other two capitals, venture and growth capitals, debt