Presentations

Author: Igor Kadimov, IPO-Congress UK Representative

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Venture capitalists specialize in debt financing of fast growing companies wishing to conduct initial public offering. Venture capital is allocated to a small number of companies, which can reassure venture capitalists of the optimal recoupment of the venture investment. Usually, investor expects the revenue from the investment within 2-6 years.

Investor's equity share is specified in the IPO listing-prospectus. It must be not less than 3-5 %. Parameters can vary depending on the volume of investments. If investment of the company requires a greater amount of resources, venture capital can be syndicated by several venture funds. In such case, the lead venture capitalist will be allocated owning a greater equity share.

Companies should take into consideration the fact that much of the IPO success will depend on the lead venture-capitalist's professional image.

The attraction of the venture capital could be very complicated and sometimes unfeasible, because of the risks and strict requirements associated with the process. Nevertheless, as numerous researches show, venture capital can facilitate the simplification of the floatation procedures and in the long perspective can result in more significant funding opportunities.

The presentation highlights the aspects of the venture capital financing and defines a number of key questions related to the appropriateness of capital attraction by means of venture funds.