2/13/2024 0 Comments A family venture sidneyAn outside venture capital board might provide a welcome resource for policy development, as well as for the process of managing the family venture investments.Ī well-managed venture capital fund within the family can be a most rewarding addition to an already rich legacy in entrepreneurship and participation in the free enterprise system. For these functions, it is best to avoid using advisors who are currently active in managing family assets or providing services to the family. Some families have considered engaging outside advisors, such as investment or banking sources, to assist in establishing approval criteria. The review and approval process is paramount in maintaining fairness in a venture capital environment. Another consideration for approval might include the extent to which the prospective entrepreneur would be wiling to support his/her own venture from both a financial and time-commitment perspective. The plan should also address the repayment of venture financing and expected return on investment to the venture capital provider. Normally, these would be on a worse-case, best-case, and most-probable-case basis. Among the conditions for consideration might be the submission of an acceptable business plan, accompanied by realistic financial projections, including cash-flow “burn rate” and break-even to profitability projections. Many families will attempt to establish policies that mirror those of traditional venture capital firms.
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