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By: John Vopel
A business funding that is eco-friendly and is good for the earth is called Green Venture Capital. The concept behind the name is that funding at the stating phase is like a seed that is about to develop. Before a venture starts to receive income, the product or service offered would need extensive studies thus needing a minimal amount only. The seed fund is needed until the company starts to make money and be noticeable to capitalists. As they say, high risk investments also possess high returns, one example of which is a seed venture capital.
Savings, Mortgage Loan proceeds or funds from acquaintance and family members are used by the investors to fund the business. Business men that are willing to put in money to the business is also an option for the business owners. They are known as such because they often invest in risky, unproven business ventures for which bank loans and formal venture capital companies are not providing. Banks and SBA credit loans typically require that a business should be in operation for at least two to three years, completed and audited financials, revenues, profits, high cash reserves; high personal net worth of the executives, personal guarantees, etc.
In comparison with other industries, green venture capital from investors are given on a later event rather than in the beginning of the operations to ensure profitability of the company.A typical Angel investor has high net-worth assets and has interest and knowledge in a particular business sector, often the industry he or she gained personal affluence. Some are successful business owners looking to invest in new businesses to expand their investing careers. A report that would state the pros and cons of the business venture financially speaking is supplied to the investors. The product model is shown to the investors at some instances.
Many has also advocated public interventions and sought for marketing strategies to decrease difficulty in providing Green Venture Capital to green companies.In order to protect the idea or the product that is being presented to the investors, a contract would be accomplished by the business owners before it is shown to them.
Seed venture capital can be different from venture capital in that a venture capital investment tends to involve significant amount of investment and complexity in corporate laws or structure. Unlike Seed Venture Capital which does not necessarily involve a large amount of money. A typical venture capital could get a huge sum of support from investors in contrast to seed venture capital who has not yet gained any reputation from the industry.
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