Build Your Own Enterprise Through Venture Leasing
Reports show that venture leasing is a growing trend in the market. The idea of venture leasing has evolved from venture capitalists investing in businesses. With only less than $3 billion worth of venture capitalist investment in the 1990’s, this number has dramatically increased to more than $106 billion in the year 2000.
Venture Leasing Defined
What is venture leasing? As the term suggests, it is an equipment lease provided by venture capital investors. Venture technology is a combined concept of equipment leasing and venture capital investing. In order to understand it better, let’s consider what business equipment leasing is.
As we all know, every business in the start up stage need sufficient funding not only to produce raw materials or buy stocks, but to purchase necessary equipment or devices as well. Instead of purchasing, equipment lease enables a business to obtain all the equipment it needs to operate the business without necessarily paying in cash. Equipment lease doesn’t require a down payment or cash payment. Instead, a business can opt to pay for it in different terms of installments. Therefore, through equipment lease, a business can use its existing capital to spend on other areas of the business.
Sources of Venture Leases
A business owner who doesn’t have sufficient own personal funding turns to venture capital investors. Venture capitalists provide financial support not only for businesses that are in the start-up stage but for established businesses undergoing expansion as well. Many capitalists provide venture leasing as well which means, they also provide financial support for the equipment leased by a business.
Who are the people that provide a venture lease? Generally, lawyers, financial consultants, independent lessors and individuals who have the financial means to invest can offer a venture lease. Banks, financial institutions, and venture capital firms are groups that businesses can turn to for a venture lease.
Generally, lessors who provide a venture lease compensate the risk of investing by requiring a significant percentage of returns on their investments. Venture lessors can ask as much as15% to 20% or returns from the money they invested.
How can successful venture lease be achieved? In order to succeed, a venture lease transaction should have a supportive venture capital investors and an excellent management team. The management team is responsible for the running the different areas of the business such as production, finance, sales, marketing, etc. Of course, a great team needs a reliable back up from its venture capital sponsors. Financial sponsors differ in their ability to provide resources that the business needs and if there is insufficient support, then it can become a problem for the managing team
Obviously, the increase in the number of venture capital investors also open up more opportunities for venture leasing. Today, more and more aspiring entrepreneurs are given the break to bring their brilliant business ideas to life. Lack of financial funding isn’t hindrance any more for these businesses. As more leasing companies offer venture leasing services, it can only mean a better future for the business industry.
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Resources for Startup Business Loans and equipment lease for startup business
