Efraim Landa is a venture capitalist who provides both funding and expertise to emerging companies. A venture capital firm typically works with a startup company that needs funding and support to handle those first turbulent years until they can make an IPO. When a VC firm invests in an emerging company it basically purchases a portion of the company in exchange for a profit that will come as the company matures. It is generally expected that a company will be able to transition from its inception to an IPO inside of 10 years with the average being somewhere around 5 to 7 years. The venture capital firm provides the necessary funds to keep the business running efficiently until the time when a profit can be made. Entrepreneurs and venture capitalists such as Efraim Landa also offer their working expertise to the business to help ensure their successful business venture. Many successful entrepreneurs have stated that the expertise that is gained from experienced businessmen is more valuable than the funding that was secured.
Looking Back at 2012
2012 was an interesting year for the venture capitalist. During the first half of the year, venture capital funds were abundant and it seemed that nearly any startup or early stage business could get VC funds. But as the year progressed there became an emphasis on the performance of the individual business and those which were not performing up to par were not receiving funding. As the year came to a close, the venture capitalist firms became much more conservative in the businesses they were pumping funds into.
Challenges VC is Facing in 2013
Probably the most prominent challenge in the first part of 2013 is to not overact to last year’s mistakes. Presently, venture capital firms are in a good place. Innovative entrepreneurs have the opportunity to be successful and to use VC funding in order to generate strong returns. But right now, the market is tense especially when it comes to early stage startups. There are numerous startups that received seed funds that are not likely to raise profits and some later stage companies that had billion dollar valuations which may have to face some very severe adjustments. The biggest challenge facing VC firms right now is making the predictions of which will end up with the greatest profits.
Biggest Opportunities in 2013
Over the last few years there has been an explosion of new mobile and internet offerings. Mobile technology is working to connect people on the broad spectrum. This is having an impact on every single consumer and business. This year there will likely be more VC funding for mobile enabled businesses and mobile platforms. Another area that is likely to see VC activity is enterprise software. The newest cloud based technology is likely to take off as the last few years have been break-out years. It is likely that more software companies will emerge bringing further improvements in operating performance.
Small businesses are probably going to take their turn this year too. Some of the younger web based software companies are experiencing great growth. This is having an impact on the small business world by granting them access to greater technology. This means that even small businesses have a chance at productivity enhancing software.
Right now the VC industry is faring rather well. As entrepreneurs continue presenting their innovative ideas; and couple that with good business ethics and practices the outlook for the VC looks rather good for 2013. As long as investors stay rational without overreacting to adverse circumstances the year should bring about stability for small businesses and investors alike.