Equity Club

Issue No. 65 - June/July 2012

Coming to terms with venture capital

by Conor McKenna

Raising venture funding and investing for equity has been called “the great financing game”. It’s a game whose rules of engagement, playing conditions and plan of attack – and usually the final score – are dictated by the money.

As an early investor of mine said to me as he withheld critical funding to force me off the Board of the company I founded, “It’s the Golden Rule, mate – he who has the gold makes the rules”.

If entrepreneurs and business leaders want to raise money, maximize their ownership position and get rich through the eventual sale of their company, they need to become proficient in the way equity investors play the game.

There are two teams of players in this game of high drama – entrepreneurs and business owners on the one side, all working diligently to build and grow a successful business. On the other are wealthy private individuals, professional investment managers of Venture Capital and Private Equity funds and senior ex...

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