The world of venture capital is mysterious and alluring. Entrepreneurs all aspire to be the next multi- million dollar funded company, backed by several top named Venture Capital firms. Remember the following about VC firms when thinking about funding your company:

1. Venture capitalists do not invest their own money. They are investing on behalf of institutional investors.
2. Venture capital firms have very specific requirements when considering companies for investment
3. The minimum investment is typically $1 million
4. Typically venture capital will not be the first round of investment for a company
5. A exit is expected within 5 years
6. Typical returns expected are 10 times the original investment
7. Only 1 in 10 investments a venture capitalist makes actually yields a return
8. Typically 5 out of 10 investments fail, while 4 break even
9. Often investments are made in syndicates, with multiple firms investing in one company
10. Members of the syndicate will hold the majority of the board of director seats
11. Expect to give up a substantial amount of equity in exchange for funding
12. The members of the investing firms have terrific experience and should be looked on as allies not enemies
13. The term vulture capitalists comes from the misconception that investors are out to steal great ideas, oust management and reform the companies
14. Venture capitalists take on a substantial risk, hence why the terms they ask for often seem excessive