Tuesday, January 03, 2006

Types of VCs

Excerpts on type of VCs
. Some key parameters as you look to choose a VC:

1. Stage — Angels, Series A VCs and Series B VCs are different breeds. While the first one will invest (maybe under a crore in India) for an innovative team and idea, the series A VC wants to see a more broad based team, lead paying customers and clear differentiation — this kind of VC funds the path to profitability. Gaps in team are acceptable but to be clearly recognized. Investment size will very with plan, but typically under $5m. Series B VC will typically take a profitable (or close to it) company, with the management pretty much in place, and basically fund expansion (depends on the business, but typically over $5m).

2. Expertise of the VC — Especially at early stage, it is hard to understand and fund businesses where none of the VC partners have expertise.

3. Portfolio — See if the firm you are looking at ha


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