Submitted by: Submitted by camden57
Views: 21
Words: 901
Pages: 4
Category: Business and Industry
Date Submitted: 04/07/2015 02:40 PM
Orchid Partners (OP) is a venture capital start-up looking to raise funds from institution to start their investment. Their goal is to collect $100 million, nevertheless they are wondering whether it would be accurate to close the first round in December 2003 at $75 million. The main reason why they want to act this way is because of investors’ pressure. However, I strongly recommend OP to pursue their fundraising until they reach their initial $100 million goal before they get into the investment process. I see two reasons to continue this process, firstly, risk of falling short of funds, and secondly, risk of doing several tasks badly. The counter-argument may be that delaying investment may result in a bad timing to get into the VC market, in add, investors might be upset about it. Still, a lack of preparation may significantly lower OP chances of success when they enter the market. My recommendation to OD is to keep their investors regularly updated with the fundraising process, and make them understood that it is in their own interest to let them reach their initial goal. It is better to get some money back in a bit than nothing now, so the company has to be financially stable.
The most important thing Orchid Partners need to do is to avoid underfunding. By keeping that in mind, OP could use its human capital to target a specific type of businesses, such as technology business for instance, and operate in a way that would enable OP to raise enough funds. As of now, OP have faced huge issues raising sufficient funds, mainly because they relied on their personal contacts in the community to get institutional investors. Venture capital business is an extremely risky business that is why OP needs to reach the $100 million target before entering the business, and running out of investment. About a third of venture-funded businesses can actually make the cut, but only a few will be extremely successful, and there is only one “google”. Thus, Orchid Partners have...