How Venture Leasing Added Millions to a Startup's Equity Value
- Topics:
- Equity,
- Venture Capital
- Tags:
- Articles4Everyone.org,
- Capital Structures,
- Equity,
- Finance,
- Financing Startups,
- Investment,
- Leasing,
- Term Venture Leasing,
- Venture Capital
- Source:
- Articles4Everyone.org
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Overview: The term venture leasing describes equipment financing provided by equipment leasing firms to pre-profit, early stage companies funded by venture capital investors. To compensate venture capitalists for the risk they take, they generally receive sizeable equity stakes in the companies they finance. They typically seek investment returns of at least 35% on their investments over five to seven years. Their returns are achieved via an IPO or other sale of their equity stakes. In comparison, venture lessors seek a return in the 15% - 22% range. These transactions amortize in two to four years and are secured by the underlying equipment.
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