Obtaining venture capital: 21 FAQs

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1. How do I find people who would be prepared to put venture capital into my business?
2. What is the minimum they would be prepared to invest?
3. And the maximum?
4. What is the difference between a venture capitalist and a business angel?
5. Would a venture capitalist (or a business angel) be looking for an all-share deal, or would they be willing to put up debt capital as well?
6. What sort of a stake would they want to take?
7. What rights would they get with the shares?
8. How much say would they want in the management of the business?
9. Would I have to give them a seat on the board?
10. How long would they want to hold the investment?
11. How can I best plan to control the impact a future sale is likely to have on the business?
12. What happens if things go wrong - for example, if they invest, but I subsequently find I cannot comply with the agreed terms?
13. Will I be able to go back to the same people for more money in the future?
14. Will I be able to go back to different people for more money in the future?
15. What is mezzanine finance?
16. What sort of information do I have to provide when I go looking for venture capital?
17. I was involved in the past with a company which went into receivership. Will this count against me?
18. Will a venture capital firm be looking for all its gain on exit, or will it want income in the meantime?
19. Can I restrict who they sell the shares to?
20. Can I restrict when they sell the shares - for example, not for at least two years?
21. How much growth in value will venture capitalists be looking for, over how long a period?

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