Venture capital is an alternative source of business financing in the form of investments in the equity of companies. Investments are usually made in innovative companies (both start-ups and already operating) with high growth and development potential. Unlike borrowing from banks, where interest is paid on the funds received, a venture capital fund buys a part of the company's shares and earns from dividends and/or by selling those shares later. It is important to know that venture capital investors acquire ownership rights to the company or part of it. Along with investments, companies receive certain competencies, knowledge, and experience.
Venture capital funds
When is it worth turning to venture capital funds?
It is worth turning to venture capital funds when:
- The company has an innovative product or service with high growth potential.
- There is a clear business model and a team capable of implementing the business plan.
- Additional capital is required for expansion, product development, or marketing.
- The company is striving for rapid growth and international expansion.
When approaching venture capital funds, companies can expect:
- Financing - capital injections that help expand operations, develop new products or services, finance marketing campaigns, and ensure sustainable growth in the early stages of a business;
- Mentoring and consulting - assistance from experienced entrepreneurs, experts, and industry specialists, assisting in strategic decisions, business model improvement, product development, and investment attraction planning;
- Network development - access to valuable business connections, including potential investors, partners, suppliers, and other members of the startup community who can help expand business opportunities;
- Market access - assistance in entering new markets or expanding existing operations, including advice on international expansion, marketing strategies, and reaching customers in new territories;
It should be noted that most venture capital funds in Lithuania do not provide financing to defense sector companies, but several funds specialize in defense or have the opportunity to invest in innovative startups in this area:
| Foundation | Baltic Sandbox Ventures | CoInvest Capital | Iron Wolf Capital | ScaleWolf | Startup Wise Guys |
| Main area | DeepTech, life sciences, sustainability solutions | Green energy, life sciences, deep technology, defense | DeepTech; artificial intelligence solutions; defense and space technologies | Dual-use technologies (defense and commercial) | Defense and cybersecurity, artificial intelligence, robotics |
| Investment stage | Early (pre-seed, seed) | Early and growth stages (seed, Series A) | Early and Growth Stages (seed - Series A) | Early (pre-seed, seed) | Early (pre-seed and seed) |
| Geographic focus | Baltic region and Western Europe | Lithuania and the Baltic region | Baltic countries, Poland, diaspora | Lithuania and NATO countries | Lithuania, Baltic States, Central and Southern Europe |
| Link | https://bsv.ventures/ | https://www.coinvest.lt/ | https://www.ironwolfcapital.com/ | https://www.scalewolf.vc/ | https://startupwiseguys.com/ |
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