Venture capital funding or financing is a good option for those corporations that have a unique corporate proposition, which could earn high ROIs or returns on investments that would be at least 30 percent annually. These corporations generally need huge outlays of capital.

The venture capitalists typically get an ownership stake, so that they would be able to share with the business risks and profits of the corporation. Hence, it could ultimately become one of the corporation’s institutional shareholders. In exchange, the corporation would be able to benefit from the operational and financial support, which would be provided by the management team of the venture capitalist.

One crucial consideration for the corporation would be to get sufficient capital to be able to quickly achieve market share. The additional funding that has been raised through venture capitalists could provide the company with a sufficient working capital to have the capacity to market, brand then sell the products of the company.

By having a venture capitalist or an institutional shareholder in your corporation, you would be able to give your customer confidence.

Also, by getting a venture capitalist on board would mean that corporate governance is a part of the policy of the company from its start. However, a negative aspect of venture capital funding would be that a company might feel that they lack control as venture capitalists could have stringent covenants such as not allowing the company to be able to change the direction of the business without asking for approval.

A company or corporation must view venture capitalists as individuals who are committed to invest on the growth of the company, thus creating a value for themselves as they provide strategic guidance, sales referrals and business network contacts.