Interested in small venture capital business ideas? If YES, here is how to start a venture capital company with no money and no experience. How much does it cost to start up?
How to Start a Venture Capital Company
It is not easy to start a venture capital company, but if you are serious about being in the capital market and you have a good financial background, experience, and certifications to back you up, be rest assured that with determination, you can comfortably build this business.
Starting a venture capital company is not a ground for rookies, it is for people who have played the game of business and know their onions. I am talking about those who have tried their hands on familiar terrain and succeeded or failed, either way there is experience and wisdom good enough for this type of venture.
I want to emphasize that venture capitalism is not for the faint of heart because it is about exposing yourself to risk. You are expected, as a venture capitalist, to fund entrepreneurs and their ideas with the money of investors and make huge returns on the investment.
Now, I will give you the steps you must follow for you to succeed in building your venture capital company.
STEP ONE: Be Sure of What You Want and Know your Limits
Starting a venture capital company is more complex than other businesses where basically you just need have to commit your money make profits. Here, you should have the ability to search for the right businesses to invest in and know how to fish out the ones you don’t want to invest in.
STEP TWO: Do your Research
Conduct a thorough research on the nature of this business, the environments you wish to hunt for entrepreneurs, their potential, the general financial market, and legal backing.
Pick an already existing venture capital company, a very successful one. Study this company very well to know how they manage risks and make their money.
STEP THREE: Acquire all the Qualifications Needed
I have stated before that this venture is not for newbies in the business world, as a matter of fact it is a basic requirement in this line of business to have had investment experiences and good financial education and record.
A university degree in any business related course like business administration, economics or accountancy will go a long way in helping you work as a venture capitalist. As someone who has studied economy and business, you would be able to differentiate between a growing and struggling entrepreneur and foresee their future success. If you have a Master’s degree in business, you have an added advantage as people will take you more seriously in the business world.
STEP FOUR: Work in a Venture Capital Company to have Experience
Working in venture capital company will be easy if you have already acquired the necessary qualification as explained in step three. When you work with an already successful company in this field, you will have the skills and experience which will serve as a strong foundation to the building of your own.
You will have the insight on how to grow small businesses, how to build good relationship with young entrepreneurs and work with them, and how to manage the many inevitable risks involved in the business.
STEP FIVE: Write your Business Plan
A properly written venture capital company business plan will not only give your company direction, it will also help you to get loan from the bank.
Your business plan is what top financiers will ask to see before making their decision to support or not support you, so it should be written with the knowledge that it speaks for you out there and must show clearly show your model, strategy for risk management, your knowledge of the market and your vision for the company.
STEP SIX: Build your Inventors’ Network and Gather Funds
You are all about generating money from various investors and injecting their funds into startup and struggling business which have a promising future, with the purpose of generating returns for these investors and of course, your company.
To create a network of investors, you need to have a good reputation for them to commit their hard earned money to you. For this reason, you are to let them see your successful records in past experiences and also show them your strategy for risk management and profit making. Persuade them more by giving juicy deals that they will find irresistible.
STEP SEVEN: Get your Company Registered and Obtain a License
Before you can start operating as a venture capital company, you must get your company legally registered and be issued a proper license which gives you authority and permission to practise. This is important, not only because it is in accordance with the law but because you are handling other people’s resources and you must be licensed to do so.
STEP EIGHT: Hiring
Now that you are registered, you will need employees in your company and the quality of those you hire will go a long way in determining the success of your venture.
Employ people who have the skills that complement your own.
STEP NINE: Look for and Partner with Entrepreneurs
Go out there, source for young entrepreneurs, startups, and struggling businesses that just need a little financial push to thrive. When you find them, put your skills into maximum use and achieve what you set out to do.