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What are some of the disadvantages to taking venture capital?

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What are some of the disadvantages to taking venture capital?
posted Sep 8, 2017 by Vijay

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Finding affordable financing for a start-up can be a challenge for small business owners. Banks are wary of loaning money to a business without a two-year track record, and raising funds from friends and family has an inherent limit. A venture capitalist, however, can provide a company with the capital necessary for start-up costs and other expenses associated with expansion projects. An individual or firm acting as a venture capitalist has the funds for investing in a new business and the financing acumen readily available to help companies in their infancy, but disadvantages run rampant. Although venture capital is a viable source of equity financing, business owners should be aware of the caveats that exist with this type of funding.

  1. Forced Management Changes
  2. Loss of Equity Stake
  3. Decision-making Ability
  4. Delays in Funding
answer Sep 11, 2017 by Pratiksha Shetty
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