Raising Venture Capital For Your Small Business

If you browse through the financial forums, chances are you’ll see a new startup hitting it big thanks to an investment from venture capital. With all that money splashing around, is this a realistic source of financing for your small business? It could be, but only in very specific situations. We cover what you should consider before applying for small business venture capital.

What Is Small Business Venture Capital?

A venture capital (VC) fund looks to invest in small and medium-sized businesses that have the potential to grow very quickly with some extra money. For example, when Facebook started out, they used VC financing to spread the social media platform throughout the world, according to Fortune. The venture capital fund buys into these companies early so they can sell their ownership share later for a big profit.

Qualifying for Venture Capital

Venture capital funds aren’t for the typical small or medium business that only operates regionally, even if it’s a profitable idea. According to Forbes, you need to have a business that can scale quickly and potentially become huge, worth $100 million or more. The show “Shark Tank” highlights the types of businesses that are potentially fund-able, like an app that could go viral or a new home appliance that every American might buy.

In addition to meeting venture capital risk and profit standards, your business also needs to be fairly…