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WHY do venture capital funds invest in businesses I just don't get this read below?

WHY do venture capital funds invest in businesses I just don't get this read below? Topic: Capital company business plan
June 16, 2019 / By Leeann
Question: Okay so say I have a business idea and I tell the VC and they give me ALL OR SOME OF THE MONEY to start the business and I STILL GET A LOT OF EQUITY IN IT. WHY wouldn't the venture capital fund just use that money since they have to pay most or all to open it themselves and then they would own it all think about it same amount of money with 100% equity why?
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Best Answers: WHY do venture capital funds invest in businesses I just don't get this read below?

Jojo Jojo | 2 days ago
The VC's are looking for firms with strong business plans and executives/staff with proven expertise or a lot of promise. They get their payoff when the company goes public - they get in return a lot of equity, also (60-40%) which they can then sell. How much do you think the VC firm made that took Google public? Or Yahoo, or Oracle, or Paychex? Probably many millions, right? The VC invests in the start up or small firm, lends it some managerial or operational expertise, and then watches the firm take off. It's a riskier investment than it would be for an investment in a publicly traded firm, but the rewards are commensurate - 60-80% returns aren't unusual in VC.
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Jojo Originally Answered: WHY do venture capital funds invest in businesses I just don't get this read below?
The VC's are looking for firms with strong business plans and executives/staff with proven expertise or a lot of promise. They get their payoff when the company goes public - they get in return a lot of equity, also (60-40%) which they can then sell. How much do you think the VC firm made that took Google public? Or Yahoo, or Oracle, or Paychex? Probably many millions, right? The VC invests in the start up or small firm, lends it some managerial or operational expertise, and then watches the firm take off. It's a riskier investment than it would be for an investment in a publicly traded firm, but the rewards are commensurate - 60-80% returns aren't unusual in VC.
Jojo Originally Answered: WHY do venture capital funds invest in businesses I just don't get this read below?
They aren't investing in an idea. They're investing in a company, which includes people working to make it a success. The people's work and the VC's money both share in making it a success so they both share in the profit.

Gemma Gemma
They aren't investing in an idea. They're investing in a company, which includes people working to make it a success. The people's work and the VC's money both share in making it a success so they both share in the profit.
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Dee Dee
because they are not smart enough to come up with new ideas for business. plus they may not know how to run the business.
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Dee Originally Answered: I have no clue what career I want to invest the rest of my life in? Help?
Try not to panic. When I was graduating from high school I didn't know what I wanted to major in, so I just majored in Business Administration with no specific concentration. I took alot of math classes because it was the only subject I excelled in. I graduated from Sacramento Univ. with a Business Administration degree with no specific concentration. I became a buyer and eventually wound up working as the Engineering Buyer for a start up company called StrataCom who's stock went thru the roof and then they got bought out by Cisco Systems & the stock did quite well. Think of all the subjects that you enjoy or do well in and take some of those. Actually, the first 2 yrs. of college you just take the general education requirements which gives you time to decide what major you want to focus on. Talk with the counselors. Talk with others who have graduated. Try not to stress too much over this. I"m sure you'll figure it out. Relax. When you're in college you'll figure out what subjects you like & the careers that those match up with. Take care.

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