Common Myths About Venture Capital Financing

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Fremont: Raising funds from VCs is a tough task as there are several perceptions about them. Would I lose control of my venture? Would my stakes be diluted? Would I be able to find the right VC? Here are a few myths that entrepreneurs might have about venture capitalists.

High Value Of Idea Means High Valuation

valuation, idea, VC, prototypeEntrepreneurs generally focus on the high value of the company by making various models in order to attract a high valuation for their company. What they forget is that VCs like to see a prototype before investing in their idea. The VCs won’t be able to focus as much on just the idea the way entrepreneurs, thus entrepreneurs need to show a working prototype for the VCs can have a belief in the venture. Also the valuations of the startup, depends on which stage it is and is based on simple calculations.

 



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