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Venture Capital- The Inside Story

Venture Capital- The Inside Story
Venture Capital and Traditional Financing- Comparison of Advantage Venture capital is a new form of financing that has come as a boon for young entrepreneurs and it plays a strategic role in financing small scale enterprises and high technology and risky ventures. In all the developed and developing nations it has made its mark by providing equity capital, so, they are more like equity partners rather than financiers and they are benefited through capital gains. Venture capitalists evaluate the risk using the following factors: Management Team Competitive Advantage Market Potential Barriers to entry Exit Strategy Banks’ Stand Towards First Generation Entrepreneurs Young and growing businesses need capital at the right time, not only to float their company in the market but also to survive in the long run. When financial institutions like banks and other private financial organizations hesitate to take the risk of early stage financing, since the credibility of the budding firm is not established, venture capital firms comes into the foray to fund the project in the form of equity which can be termed as “high risk capital”. Venture Capitalist is like an Equity Partner Although there is a misconception that the interest of venture capital firms is mainly driven by cutting edge technology in the industry, it is not always the case with all venture capital firms. A venture capitalist associates high risk with huge profits; of course after thoroughly analyzing the prospects and consequences and the viability of the project. The venture capitalist becomes a partner with the entrepreneur in his business. True venture capital financing need not confine itself to high end technology products, any risky idea with great potential can be financed and venture capital is an all powerful mechanism to promote and institutionalize entrepreneurship. Focus on Growth Mainly venture capital focuses on growth. A venture capitalist is very much interested to see a small business growing into a larger one. He assists in setting up the business, funding it and comes all along to see the firm grow. If it is potential equity participation, the venture capitalist can come out of the partnership once the company becomes profitable and take back his money by selling the shares or convertible securities. If the firm opts for a long term investment from the venture capital finance, the financier has to develop an investment attitude for a long term, say five or ten years to allow the company to make large profits. Active Participant in the Operations of the Firm Another form of financing is that the venture capitalist has his hands on management by which he becomes an active participant in the operations of the firm and his thinking is streamlined as to how to multiply and make quick money which is a win-win situation for both sides. Not only finance, the venture capitalist also contributes to marketing, technology upgradation and management skills to the benefit of the new firm. Venture Capitalist- Banker, stock market investor and an entrepreneur in one. The venture capitalist’s management approach is significantly different from that of a banker whose prime concern is collaterals and securities in the form of assets. He keeps his hands off the management and plays safe. The venture capitalist can also not behave like a stock market investor who invests money without having thorough knowledge about the company’s business and management. He combines the qualities of a banker, stock market investor and an entrepreneur in one. Latest trend is that popular and giant software companies promote their content through the budding enterprises, by providing with the latest technology, training and expertise apart from financing, which spreads the geographical area of operations of the parent...
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Scope of Management

Scope of Management
SCOPE OF #MANAGEMENT  Management determines the very survival of the organization Management concepts are applied in both #business and #non-business organizations In countries like USA the demand for management consultants is widespread and they have more clients from 1)      #Government 2)      #Hospitals 3)      #Universities 4)      #Schools 5)      #Professional associations 6)      #Community agencies etc. In India it is sad to see that only graduates coming out of reputed #business schools being placed in the cream of positions by the  corporates and others who pass out from the so called second grade institutes struggling to ground themselves. Many institutes offer management courses in the undergraduate and graduate levels for name sake that fail to implant the core purpose and perspective of the concepts of management in the minds of individuals. Also lack of expert faculty who have wide exposure and industry experience make the course dull and lifeless. Coming back, Management is said to be “Universal” and applied to all the organizations of the society, whether it is large or small, profit making or non-profit making, and a manufacturing or service enterprise Managing is the key social function and management is the effective, integrative,constitutive, determining, and differential organ of the society Management is the organ of leadership, direction and decision in a business enterprise and responsible for producing the results Management has evolved as the most lucrative academic discipline by itself offering huge scope for the graduates to perform and excel  as #teachers. #Management faculty are in great demand all over the world and are as well compensated for their services. New disciplines of management like #Public Health, Health care, #Information Technology,#Labor management are gaining importance Effective management is aimed at improved productivity ( efficient people produce effective results-so ‘RIGHT PEOPLE FOR THE RIGHT JOB’ becomes essential) The society has various facets like government, suppliers, local community, competitors, unions, stock-holders, customers etc. The manager is the spokesperson in-charge of negotiating and spending much of his time to predict and influence the future environment and take pro-active measures. This is the managerial function relating to the environment....
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