What are the different types of venture capital financing?
The different types of venture capital financing depends on the investment of specific purpose within the life of target company as the high return rate of the company remains constant and it has no effect on it. There are three types of venture capital financing:-
Early Stage Financing which is divided into three parts of its own they are as follows:-
1) Seed financing- in this small amount is required for the purpose of starting up the loan. The amount which is been used in this is received by the entrepreneur.
2) Start up financing- in this finished developed products and services are given to the companies as this can also be used under the initial marketing where the development of products and services takes place.
3) First stage financing- in this companies which has spent all their starting capital and which are requiring further finance to begin their business activities at full scale are used.
Expansion Financing is also subdivided into three parts namely as:-
1) Second stage financing- in this companies begin their expansion this is also termed as mezzanine financing as it is used for the purpose of providing the assistance to a particular company to expand the company.
2) Bridge financing
3) Third stage financing
Acquisition or Buyout Financing- in this acquisition and management finance are used which assist the company to have certain parts or entire company under themselves. It is also termed as leveraged buyout financing. This also helps in the management group to obtain a particular product from another company by collaboration.