Venture Capitals & Entrepreneurship

Venture Capitals:

Every business needs some cash to run itself. There are some ways through which you can fund your business including:

a) Personal savings

b) Bank Loans

c) Venture Capital

The VC model is a great way to get your business running by acquiring a large amount of money from a Venture Capital firm. This is good for companies who want to grow dramatically very quickly or those companies whose nature of business demands heavy cash investment.

A VC is typically a firm that collects funds from wealthy individuals who wish to invest money in businesses for profit. This collected fund is then used to run the business for which it was collected. The idea is that when this company/business goes public or is acquired by someone else, it will be worth hundreds and millions of more money than what was invested. This profit is then distributed among the initial investors of the business.

A VC firm not only offers money but also vital advice on how to run the business from a financial perspective. The people in the VC might have more experience and exposure to markets than the new businessmen themselves. So that’s basically how it is a very good funding idea for startups.

The downside of such a model would be that the VC is depending a lot on the business for profit. One cannot guarantee if the business would show any return on investments or not. Secondly, what if the business does not want to liquidate its assets?

Entrepreneurship

Entrepreneurship is the act of being an Entrepreneur who is defined as:

“One who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods” – Wikipedia

So technically, entrepreneurs are people who come up with a unique idea/business, take initiative to bring it forward, formulate strategies as to what resources would be required to implement that idea, and then put that idea into working.

In today’s world, entrepreneurship has become a very popular model. With so many students graduating all over the world each year there is no guarantee that all of them would have jobs waiting for them on a golden plate. The industries are moving at such fast pace that we need more unique ideas to come forward, more young people with bright minds to take initiative and come up with innovative ideas and contribute to the global economy that can solve many problems of our world!

Entrepreneurs have leadership characteristics. They envision a certain idea perceived from opportunities arising around them and take advantage of that fact to implement their idea. They are risk takers and decision makers. They speculate their opportunities and risks and form a strategy accordingly.

Entrepreneurship Success Story:  Instagram – photo sharing platform

Instagram is a free photo sharing application that allows its users to take photos and add customized filters to their pictures in order to enhance its colors and beauty and share it on different social networking platforms including instagram’s own social network. Launched in October 2010 by Kevin Systrom and Mike Krieger, this application has gained much popularity among its users.

Initially Instagram started as a mobile application for Apple devices only, but later due to its rapidly growing popularity they expanded towards Androids as well.

Instagram was formed by its entrepreneurs based on the Venture Capital Model. The company had only 13 employees. It was recently acquired by Facebook along with its 13 employees for approximately $1 Billion. This acquisition by Facebook, which is an entrepreneurship success story in itself, could do a lot good to instagram’s unique technology.

Instagram’s popularity can be measured by the number of awards it has received:

• In January 2011, Instagram was the runner-up for "Best Mobile App" at the 2010 TechCrunch Crunchies.
• In May 2011, Fast Company listed CEO Kevin Systrom at number 66 in the "The 100 Most Creative People in Business in 2011".
• In June 2011, Inc. included co-founders Systrom and Krieger in its 2011 "30 Under 30" list.
•  In September 2011, Instagram won "Best Locally Made App" in the SF Weekly Web Awards.
• 7x7 Magazine's September 2011 issue featured Systrom and Krieger on the cover of their “The Hot 20 2011” issue.
• In December 2011, Apple Inc. named Instagram "App of the Year" for 2011.