Syntax error What are the factors considered by venture capitalist before investing?

What are the factors considered by venture capitalist before investing?

The factors considered by venture capitalist before investing are as follows −

  • Management Team − Investors look for management team that have skills, knowledge, and their record of accomplishment. Commitment towards the goal is the key.
  • Viability of the project − Capital firm will look at product market, end user, competitors and growth of industry/sector before investing in a project.
  • Business plan
  • Cost and returns − Project cost, financing scheme, source of finance are also studied in details. Investment for a project will be depends on cash outflows. Internal rate of return (IRR) tells about risk associated with the project and the time to recover their investments.
  • Technology − Investing decisions depends on current technology of firm and their agreement to use new technology.
  • Market conditions − Market size, market research, prospects, policies, strategies, competitors will be considered before taking investment decision.
  • Other factors − Raw material, labour, government policies, location etc. will be considered before investing. These are indirect factors.
Updated on: 2020-09-26T13:40:09+05:30

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