If you are planning on a commercial real estate purchase or starting up a business, you may have wondered about funding options including venture capital. You may wonder what venture capital is and if it is a good option for you so having some answers can help.
In short, venture capital is a method of funding for a commercial real estate or start-up venture. It is one way of obtaining start-up capital for a commercial real estate or other type of endeavor. There are several stages of development that are common for a start-up endeavor that goes through the venture capital process. Seed funding, usually from family and friends, is typically the first funding that start-up will obtain. It is important to understand the legal requirements of the process, and at this stage, so the start-up does not limit its ability to attract and obtain funding in the future.
The next stage, for those who can obtain it, is angel investment. Angel investments come from individuals with a high net worth who desire to invest in a start-up business or other venture. According to the U.S. Small Business Administration, there are approximately 250,000 angel investors that invest in 30,000 start-up businesses annually. There are important federal and state registration requirements and other legal aspects of starting a business or seeking funding for a commercial real estate projects.
Additional stages of the process include development, maturity and growth phases and it is important to note that additional sources of funding may also be possible. Starting up a business or embarking on a commercial real estate project are exciting opportunities. It can pay to ensure the entrepreneur understands all the legal requirements and considerations that go into it to help enjoy a successful project.