Venture capital: mirage or oasis for growth companies
Supply and demand may be a key factor that pushes expected returns in the venture capitalists market. Since the economy is heating up, there are more deals created, which means there will be more demand for venture funding and as a result risks in multiply based on the sheer number of projects undertaken. It’s a hugely volatile market where predicting results is a difficult stance.
Finally, IPO’s are up. This should, over time, increase interest by large investors in putting more money into venture capital and investment market. More IPO’s mean more liquidity, and better real returns in the transaction market. The national venture capital association estimates that more than $30 billion a year is invested in contrast to $20 billion a year invested by organized venture capital funds.
In industries assets are securitized effectively because they consistently generate future revenue streams or have good potential for resale in case of foreclosure.
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