Darin Pastor is the founder chairman of Capstone Financial Group. Through his venture capital company, Darin Pastor buys shares of other company’s stock in order to invest in their futures.
Harvard Business Review c has called venture capital “an engine of economic growth,” explaining that venture capital goes into the infrastructure of a company. Shoring up assets and working capital plus the marketing, sales, and manufacturing help the company commercialize its innovative concept.
Banks require assets to lend to corporations, and startup businesses have fewer assets than established companies. Investment banks and stocks are both regulated to protect the investor. The requirement for stock offerings in the public market is limited to companies that have more than $10 million in revenues. Venture capital companies fill the gap.
To attract the attention of a venture capital company, the entrepreneur must understand the point of view of the venture capital company.
An entrepreneur must first know the competition, companies are doing the same thing. In addition, the entrepreneur’s position in the company, reputation and skills, willingness to take risks, and ability to market him- or herself matter. Venture capital companies look for skilled managers perhaps more so than innovative ideas.