The Stages of Venture Capital

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Venture Capital
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A devoted father of two, Bill Malloy is an investment professional with years of experience in real estate investments and venture capitalism. Currently, Bill Malloy serves as a Board Member and president of the investment firm Malloy & Company. In addition, Mr. Malloy is the founding general partner of Sway Ventures, a venture capital firm that invests in early to mid-stage technology companies.

A form of active equity financing, venture capital is a generally utilized by young firms in a high growth stage. The venture capital process begins with the submission of a business plan. This plan, submitted by a startup firm to a venture capitalist, helps to determine if the firm meets the requirements of the investment fund. A period of due diligence follows, which involves the completion of an in-depth analysis of the firm’s finances, operations, and management structure. The venture capitalist then decides whether or not to make an investment offer. If an offer is made, the venture capitalist then plays an active role in the ongoing strategic operations of the startup firm. The process eventually ends with the exit of the venture capitalist from an ownership role via a merger, acquisition, or initial public offering.

Things to Consider When Investing in a Startup

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Investing in a Startup
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With an impressive track record of business leadership and venture investing, Bill Malloy serves as a founding general partner and investor at Sway Ventures in San Francisco, California. In this capacity, Bill Malloy oversees the company’s investments in early-stage & early-growth software companies.

When investing in a business startup, investors should consider several factors, including why they have the opportunity to invest in the startup. Most new companies seek investments simply to raise money. This is not automatically a red flag, but investors should consider that the lack of financing may suggest business struggles.

Further, investors must be aware that many startup investments do not have returns for at least a couple of years. Startups need to funnel any earned money back into the company, so returns may not appear until the business is established.

Investors can reduce risk by investing in markets they know. By investing in familiar markets, investors can better understand a company’s structure and get a more accurate idea of the business’ potential.

However, diversifying is still wise. Multiple investments increase the chance that investors will receive returns on their money.