Importance of Venture Capital For New Business Startups
Author : Writer at Chatur Idea
Posted : 3 years ago
Importance of Venture Capital For New Business Startups
11Apr, 2016

You have done a thorough preparation for an ambitious business plan, and now it is the turn of launching your first ever business startup in India. However, have you considered the money matters well? Raising capital could be one of the trickiest things if you do not plan well.  Seeking the help of venture capital is one of the secure ways to raise the fund. While venture capital firms invest millions of rupees every year in India, there is an equally high risk. The company has to analyze the venture thoroughly to avoid the risks. Also, they have a strong hold over the business decisions because they own a portion of the company. Having said it, financial experts rate it one of the most attractive fund-raising options for India startup ideas.

What does a venture capitalist look for before investing?

Well, nobody wants to run a business that incurs the losses. Neither you nor the venture capital investment company likes it. Therefore, a few parameters are evaluated before putting the money.

  • The company looks into the business idea proposed by you. If you have something unique business proposition, and the barriers to entry are high, then it is very much likely that you get sizeable money. If a project can’t be replicated easily, then there is not a competitive threat in the near future. If the product or service can be parented, then it is the best candidate for venture capital investment. The investors would dribble over incredible ideas.
  • A company that offers an excellent value proposition for a venture capitalist is always the best. Remember, the people who invest in your company know the market very well. Thus, you have to convince them well about the uniqueness and superiority of your business venture. A compelling value proposition wins the game in the first attempt. It is the reason; business mentors insist for effective presentation to the capitalists. Entrepreneur India ideas are evaluated on the criteria of customer persistence, uniqueness, and market potential.
  • Scalability is another pivotal aspect. Is there enough willingness of the business owners for scaling up the business in the long run? How big is the marketplace? What will be the situation of startup competition India after two or five years from now? Is the market potential sizeable and exciting? If yes, then the venture capital company is certainly excited about it.


A cool,unique business idea gets the best venture capital investment.