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VCs invest in a diverse range of companies to mitigate the risk associated with the inherently uncertain nature of venture investments. Given their portfolio approach, they seek to maximize returns by identifying and investing in companies with high growth potential. As such, they often target innovative technology startups or industries on the verge of significant transformation.
Interestingly, many investors with specific theses often bend their own rules. For example, an investor focused on sustainability might still invest in a software company that sells to solar farms.
Angel investors are typically a diverse group of individuals who have amassed their wealth through a variety of sources. However, they tend to be entrepreneurs themselves, or recently retired executives from business empires. The majority look to invest in well-managed companies, that have a fully-developed business plan and are poised for substantial growth.
Venture capitalists use these indicators to determine a portfolio company’s growth and to gauge the value being added over time. This analysis helps them make informed decisions about follow-on investments and support strategies for their companies.
With mature companies, the process of establishing value and investability is fairly straightforward. Established companies produce sales, profits, and cash flow that can be used to arrive at a fairly reliable measure of value. For early-stage ventures, however, VCs have to put much more effort into getting inside the business and the opportunity.
, le il y a 1 mois et 3 semaines.
