Advantages of Venture Capital (Essay Sample)

Advantages of venture capital
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Advantages of venture capital
INTRODUCTION
Investment banking refers to the banking division that creates capital for use by other enterprises. An investment bank underwrites new debts and equities security for different corporations. An Investment bank can guide issuers on the issuance and stock placements. The Barker Group as an investment bank assists in the selling of securities, completion of mergers and acquisitions, reorganization and brokerage for companies and private entrepreneurs. It also trades securities for their personal accounts. The Barker Group is currently thinking of initiating the Venture capital division. Venture Capital refers to the funds from investors with the aim of starting businesses for the long-term growth. Such startups do not have an avenue to the capital markets for the generation of the initial capital outlay. The investors in this case are at a risk but the returns are for the benefit of all the stakeholders. The addition of new services in line with the company’s production line is a quality aspect of business improvement. The venture capital opportunity will increase the company’s business as per the existing circumstances of operation operations. Having been at the clients meetings, I understand that managers need to promote Barker’s well-documented services under investment banking. Venture capital creates the necessary adjustment procedures as per the existing business opportunities. The objective of this paper is to make an analysis of the advantages of venture capital in the funding of business operations.
PROBLEM STATEMENT
Baker Investment banking not doing very well profit wise. Barker has an existing performance in the provision of financial services. Its connections with institutional investors and links for dealing with quality clients transitions the banking portfolio into a new venture capital business. A number of issues need to be addressed before the venture capital business can be fully established within the Barker group. The existing client base carries out different banking operations with the bank (Ackerly & Valverde, 2009). The rate of business creation is not favorable at the current time. A new approach is useful in dealing with the variation differences that are part of the best practices in providing more services to the existing clients. The reception of the new business opportunity by the clients is an issue of concern because they may not understand the need for a different approach in financing their operations.
SOLUTION
Investment banking managers are constantly looking for ways to bring in more deals. Adding a new service to the suite of services provided would do exactly that while at the same time increasing the bottom line. Furthermore, having sat through numerous client meetings myself I know that managers like to promote Barker as a full-service investment bank but that statement is simply not true if it does not cover venture capital
As a new business opportunity, venture capital will address the issue of the most conclusive financing structure to new business set-ups. Great consumer awareness facilitates the initial quality reception in the market for the advancement of the normal business operations. A quality evaluation of the issues regarding the venture capital need to be carried out before the initiation of the business undertaking that considers a variety of business dimensions as per the existing customer flow (Bayraktar, 2013). The market should be well educated regarding the right operations in facilitating the conclusive trading operations with respect to the venture capital. The Barker Group is expected to carryout a detailed research on the best policies with relation to the necessary execution factors that are part of the investment portfolio. Other players in the financing industry have been offering the venture capital business for a long time. It is the duty of the Barker group to come up with a different analysis of the related business concepts before the initiation of the venture capital dimension. Baker’s investment banking should determine the right structure of capital portfolios that address the existing client procedures as per the right banking standards.
Two approaches exist with respect to the Venture capital opportunity. The qualifying companies need a careful evaluation of the existing business opportunities before they settle for the venture capital option. Barker may provide the brokerage services by bringing the entity into contact with the venture capital funding and gain a commission for the total sum of venture capital acquired by the company (Ante, 2008). The brokerage option is an indirect approach in participating in the management affairs of the entities that qualify for the venture capital option. The necessary elements in dealing with the start up conditions appreciate the value that is created as per the existing business conditions of the funded business. Barker in this case will not conclusively deal with the day-to-day operations of the clients. It is therefore difficult to determine the right success of the entity as per the situational challenges that are part of the best business performance.
The second approach relates to the more risky challenge of investing as a venture capitalist for the making of huge profits for the investment-banking department. This move calls for an intensive investment process that requires a quality understanding of the normal functioning of the business before the investment is conducted. A huge amount of capital investment is carried out on the clients. Barker is then to create the internal structure that addresses the existing challenges in meeting the client’s business plans (Bayraktar, 2013). The client manager is concerned about the success of Barker in dealing with the existing financial compilations as per the existing business conditions. The manager therefore makes an evaluation of the Barker’s performance from the year 2003 when it was incorporated. The profits made for the year 2014, will therefore be channeled back for the joint venture business of value in the long-term. This indicates that dividends will not be paid for the year 2014. A reinvestment is necessary in dealing with the cash shortage. The remainder of the capital will be used in the provisions of loans to other clients.
Advantages of adding a venture capital division
Venture capital is one of the utilized opportunities by the Barker Group. The bank is small and mainly deals with micro capitals and small capital financing. Managers have exposures to the companies that are below the institutional capital line. Institutional investors value the investment in small amounts. The venture capital division will take over from the existing institutional investments (Ackerly & Valverde, 2009). Merit should relate the relevant attributes in dealing with the absence of the small capital investments. Barker is now expected to take the place of institutional investors who for a long time have ignored the small business operations. A quality approach in addressing the existing complications relates the fundamental elements of addressing the qualitative approach in the provisions of financing services.
In the implementation of the venture capital, the bank should come up with an experienced venture capitalist who understands the business sufficiently. These venture professionals are in a position to evaluate the applying companies by accessing the related risks in the general business procedures as per the right conditions of business functioning. The qualified venture professionals will also come up with a detailed analysis of the amounts that Barker is capable of financing the related funds with a better understanding of the payback conditions. Such a move acts an encouragement in making more investments that are inline with the existing business portfolios. The deal flow in this case plays an important role in addressing the related issues that are part of the best financing policies. The different approach in determining the relevant attributes as part of the venture capital business relate to the most conclusive approach in dealing with situational issues regarding the best operating policies.
Associates and analysts have the right time considerations in providing the venture capital business. Such professional have an experience on the related issues in the implementation of venture capital. It is their responsibility to address the Barker group as per the right dimensions of dealing with declining companies. The ability of the qualifying companies to come up with a better review of the venture capital agreement will be judged by the associates who have an interest in the existing business functioning in paying back to the investors (Ante, 2008). A number of experienced interns can be recruited to facilitate in the initiation process. After sufficient revenues have been generated during the quarter of expansion. It is useful to come up with a qualitative approach in dealing with the related issues that are part of the expansion process.
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