Informal risk capital.
Informal risk capital is a market characterized by a group of wealthy virtual investors seeking to invest in an equity kind of investment opportunity. Virtual investors provide all the business funds by providing capital ranging from $10,000 to around $500,000. Virtual investors in informal risk capital markets have their own specific preferences on ventures they want to invest in, as stated below.
Investors preferences when choosing informal risks capital
Investors in informal risk capital markets are interested in financing
- Manufacturing companies of consumers and commercial products
- Software
- Natural resources and energy
- Services
Venture capital.
Venture capital is a type of investment characterized by wealthy investors who invest in small companies and start-up companies with projected long-term potential to grow. Venture capital has a number of different advantages and disadvantages, as stated below.
Advantages of venture capital
Capital venture promotes to the success of a company by;
- Providing the finance and capital required in the business.
- Providing expertise, resources and even information required in the business.
Disadvantages of venture capital
- Profits are only accrued in the long run.
- The process of venture capital is complicated and long.