What is venture capital?
When you want to start a project or launch businesses, ideas are many but capital can be a challenge. One of the convenient ways to fund the idea you come up with is by getting venture capital. So what is venture capital and how can it help people with small business ideas?
Before we get into the details of venture capital, it’s good to examine the other methods of getting capital. Loans, for example, are the most popular form of funding. In this case, an individual or an institution offers you a specific amount of money which you have to repay back over time. Loans usually have an interest attached to the original amount. The lender provides the money with the hope that you will pay back in full. The interest charged is how the lender benefits. The main characteristics of a loan include:
- Lenders do not get involved in your project or business
- You have a specific period to repay the entire loan
- The loan is oven based on your current income levels or you might need to provide an asset to serve as collateral
- In case your business or project does not work you are not exempted from repaying the money
How venture capital Differs from Loans
With venture capital, you still get money from an individual or institution to fund your project. However, you are not required to pay the money back nor is there interest charged. However, the person or institution providing the money owns some percentage of your business. Therefore you have to share an agreed percentage of the profits made. Another significant difference is that in case your business fails, you do not owe anyone money.
With the venture capital option, money is provided based on the perceived viability of your idea and the provable skills you have demonstrated. You do not have to provide proof of income unless you are expanding an already existing project. In addition there is no need for collateral to secure the money. These are all benefits especially for someone who is looking to start a business or develop a previously untested idea.
How to Get Venture Capital
With the venture capital option, money is provided based on the perceived viability of your idea and the provable skills you can demonstrate. You do not have to provide proof of your current income unless you are expanding an already existing project. In addition there is no need for collateral to secure the money. These are all significant benefits especially for someone who is looking to start a new business or develop a previously untested idea.
Each Venture capital provider sets out the requirements that potential applicants must fulfill. The requirements might determine the kind of project, the qualifications the initiator might have or the stage at which the project should be. MavenCORE has a few requirements too, but they are simple enough for anyone to fulfill.
- Applicants must prepare a project proposal following the guideline provided by MavenCORE. You may have other better formats, but your project can only be considered if it satisfies the MavenCORE version
- Applicants must have a balance of 5 or more Mavecs in their wallets when submitting a proposal. Why? to prove that you know how to use Mavecs (getting a wallet and converting Mavecs to cash). In most cases, project funding is disbursed in the form of Mavecs Coins so every project owner should learn beforehand how and where to convert Mavecs to cash.
- The main target is business projects that can generate income thus sustaining themselves once funded. However, any other innovative project is welcome.