Venture Capital Can Be a Completely Safe Investment

While the gift of an organ for someone dying is a fantastic gift, and an airplane with good weather is a huge gift if one is caught in "Denver's Weather". One Santa that was on TV tonight gave away perfectly operating used cars for women with kids and inadequate income to buy a decent running car. Another type of gift can be one that returns "Thanks" forever; the gift of venture capital.

I agree, this is pretty "me-me!" or perhaps it can be considered selfish. It also might be neither. One could discover, after reading books on start-up financing, that, excluding those with savings in the bank, fewer than one in one hundred "ideas for a new business" ever get financed. OK, boo hoo. We can't all get what we want. True. But what are the consequences of not getting financed and what are the risks to the funders? Let's examine this perhaps
very risky field of venture capital and see if there are any ways of making investing, FOR THE investor, safer than a Vegas crap shoot!?

Every book on venture capital indicates that fewer than one in one hundred proposals are considered seriously and when said single proposal clears the hurdles of the panel at a VC firm, it is determined that said investment must be So good that it returns a minimum of 30% per year so that the VC firm earns back all the money it invested in bad deals throughout the year. While insuring good deals makes excellent business sense, the way this is accomplished also costs those other "visionaries" [new entrepreneurs] their funding and thus, their dreams. You see, it seems that if one VC firm turns down a deal, that some how other VC firms hear about the turn downs and usually, the entrepreneur tuned down never sees an offer of VC FOR this deal-ever.

That seems a bit cold. It is but that is not the worst part of it. When a VC in his office turns down a deal [remember, 99 out of a 100 are turned down], the VCer does not tell the entrepreneur why his deal is being turned down-so, the entrepreneur spends time and more time and more time seeking funding-with no idea that he needs to modify his presentation or idea in any specific way to make it viable to the Venture Capitalist.