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The initial venture capitalist investment is made generally in the technology risk stage this is because the entrepreneur are actually testing, refining and developing their technology."It is important to note that many renewable energy investments require a different type and level of support from VC firms than have companies in previous VC-funded industries.The venture capitalist are highly selective, typically they fund about 1percent of the business plans in which they consider important.
It in the hard times that the large companiesâ€™ often shed off jobs and call for relief from taxation and other government-induced burdens, the need is actually greatest for the new entrepreneurial activity and the support for such activity(New Energy finance,2008)The current venture capitalist mainly raises money from the large institutions such as the banks, mutual fund companies, and large pension funds and from the high- network individuals in the society.
They the locate and identify promising entrepreneurial companies in which they then invest their money for a period ranging 5-8 years ( the time frame may be longer but not more than 10 years)(Mollica et al 2007).
Over the last three decades, the United States venture capitalist industry has invested approximately $456 billion in more than 27,000 companies, including companies such as Google, Apple, Cisco, Staples, e Bay, Genentech and Amazon it has assisted in the support of the growth of an entire new industries such as the information and technology and biotechnology.
In 2008, United States companies that were supported by the venture capitalist employed approximately 12 million people that is about 11percent of employment in the private sector and it generated approximately $ 3 trillion in revenue that is about 21 percent of the United States economy.
Before the point at which the VC firms invest, the public money may be used to support the initial creation of the new technology and business ideas though the government funded research and technological development.
As the venture capitalist, funded firms continue to grow steadily they then turn other different players in the financial ecosystem for any continued cash support(Landstone 2007).
This research paper is about the role of capital venture in the development of the U.
S renewable energy sector , and the aspect of the government policy that have the major impact on the venture capital investing in the renewable energy.
The main reason for making this investment is actually to earn a significant financial return for the Venture Capitalist firma and the institutional investors.
The roles of a Venture Capitalist firm is to find new companies with the largest potential of growth and actively assist this firms to grow and then succeed, they not only provide cash for the firms at a critical point but they also share in the management and technological expertise thus providing a useful introduction to the helping tasks such as the recruitment of key management positions as the companies gradually grows(Gladstone, 2002).