Qualifications Necessary For Venture Capital Funding
One example of our Venture Capital funding is the loan that we’ve provided for a healthcare company that is in the process of rapid expansion. The company needs to obtain FDA approval for expansion, which takes 9 months to a year. During that time, the firm needs to be operating, and has personnel, rent, and other expenses, but no income from the expanded locations. Our loan is interest only for two years, and then is repaid monthly over 3 years.
Looking for a Venture Capital Loan?
Generally, we don’t provide funding for startup businesses where there are no sales. The exceptions may be where someone has extensive experience, and is then going to start their own company in their field. We might consider funding if the story is compelling.
In our definition, Venture Capital funding can be either equity, which means that the investor owns stock in the company; debt, which means that the funder provides money with an interest return; or some combination of both. Our funding is Mezzanine debt, which means that our return is a fixed interest rate plus a formula where we can obtain a bit more interest if the business is doing well. TABASFUNDING in general, does not ask for equity, warrants, or any form of ownership in your business.
Advantages and Disadvantages of Acquiring a Venture Capital Investor
There are pluses and minuses of each type of funding. The plus of equity is that the business usually only needs to pay the investor when there are excess profits. The negative is that if things are going well, the investor owns a piece of the company.
Debt means that the money is borrowed, there will be interest to pay and that the principal needs to be repaid. The upside of debt is that the borrower is able to repay the debt and doesn’t give up ownership in his or her company. With TABASFUNDING, personal guarantees are required. From our point of view, borrowers need to be confident enough in what they are doing to stand behind it (guarantee). Please see the “Frequently Asked Questions” section for general terms.