New Development In Venture Capital Will Help In Finding More Winning Companies

Most entrepreneurs are fully aware of the track record of the Venture Capital industry. Typically, out of 10 businesses that receive investment, two will be failures, two will be successful, and the rest will provide returns little different from saving money in the bank.

For over 25 years, the industry has always attracted thousands of highly-skilled and highly-paid staff, along with having access to substantial finance and funding, sophisticated financial modelling and in-depth due diligence procedures. So why the poor track record of picking business winners?

According to the BVCA (British Private Equity and Venture Capital Association), around 1,600 UK businesses receive investment each year. The Association represents 400 venture capital and other firms, including 3i, Barclays Capital and Cinven. From one of its major publications, the BVCA cites possible reasons for business failures: management's lack of response to a changing environment; major cash flow problems; increasing overseas competition; over-expansion and loss of control; and early success, but no staying power.

"We're developing a real solution to this problem which will help venture capital companies select three winners out of ten, resulting in a 50% increase," says Des Vadgama, a leading business growth expert.

This welcome news could have far reaching effects, as 1,100,000 people are currently employed by private equity-backed companies in the UK. Furthermore, as the biggest investors in venture capital and private equity funds are pension funds and insurance companies, any higher returns received may ultimately be passed down to their customers.

The industry collectively invested over £21.9 billion in 2006. "With such a huge amount of money involved, we really must ensure we get this totally right" comments Mr Vadgama from consulting firm V Factor, at VFactor.co.uk

http://www.emediawire.com/releases/2008/11/prweb1652504.htm

Business Financial Services

New Development In Venture Capital Will Help In Finding More Winning Companies