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Venture Capital Group

B4 Ventures provides venture capital and partners with companies that have a solid game plan, a real market opportunity and a management team that is well equipped to execute and deliver results now. Unlike many venture capital firms, B4 Ventures partners with businesses not because they fall into what analysts are saying is the next hot industry, but because it has profound merits on its own. We invest from $250,000 to $5,000,000 in businesses and work directly with management teams to deliver long-term value to shareholders. We consider investments in all kinds of industries.

What is "Venture Capital"?

Although it has many connotations, we define venture capital as illiquid investing in high potential, high risk business opportunities. More specifically, venture investments are classically minority equity interests in young, very rapidly growing companies with the potential to become large, often public companies. However, they are not yet credit-worthy, and thus are not eligible for traditional bank debt financing. Often lacking many of the resources required for success, immature companies call on the know-how as well as the venture capital dollars of the investor.

How is Venture Capital different from Private Equity?

Private equity is a broader investment category that also includes leveraged buy-outs, late stage mezzanine investments as well as some PIPES (private investments in public equities). These private equity investments usually include more debt than equity. Venture capital falls at the earlier stage in the private equity spectrum, with emphasis on the word equity.

Why invest in venture capital?

When properly executed, venture capital investing can provide substantially enhanced long-term returns to a diversified investment portfolio. It operates in a more imperfect market than most public investments, and consequently investors see profit potential in "getting in on the ground floor" of promising companies. There's excitement, too, in the association with technological developments and the creativity of forward-thinking entrepreneurs. The societal implications associated with building companies and entire industries are an equally powerful motivator, with all that means for creating employment, improving the quality of life, preserving precious resources and sustaining U.S. competitiveness in world markets.

Why it is safer and often more profitable to invest in funds rather than directly in deals?

History has shown that private equity investing, especially venture capital, is truly a full-time business, seldom rewarding inexperienced or part-time participants. Direct investing requires both highly specialized skills and access to a broad stream of investment prospects, called "deal flow". These requirements are generally best met by the managers of venture capital funds and who typically invest in only ten of the 1,000 plus they see each year in their areas of expertise. They are not as prone to fund "me-too" or "shop-worn" companies that filter down to casual investors who operate at a disadvantage - they're simply not "in the loop"!

What makes a good venture capitalist?

Management backgrounds and networks in specific industries, financial skills, "people skills", negotiating skills, statesmanship, and boundless energy are some of the prerequisites of a good venture capitalist. But all that's not enough, because at its core, venture capital is truly an apprenticeship business. It takes years of mentoring to learn how to assess investment opportunities, set pricing and strategy, build and motivate management teams, deal with inevitable and unpredictable threats to the businesses, source additional capital and strategic partners, and, finally, divest (for better or worse) these illiquid investments. The good ones view it as a calling, not a career.

How are venture funds structured?

Venture Funds are usually organized as limited partnerships where the investors are limited partners, and the managers are the general partners. The majority of funds range in size from $5 Million to $100 Million, and have between 2 and 5 GP's. These partnerships generally have a five to ten year life, which allows sufficient time for the managers to make investments, assist in their maturation process over several years, and then arrange appropriate sales of the partnership's interests.

How do I invest in a venture fund?

Venture fund general partners accept "qualified" limited partners, who commit in writing to invest specific sums in their fund. Limited partners become parties to the Partnership Agreement, which spells out the terms of the fund, and must be prepared to invest their commitments when called upon by the GPs. Capital calls are made in some funds over the first years of the partnership's life, on fairly short notice.

How is my investment repaid?

When a company in the fund's portfolio is sold or taken public, the partnership receives compensation in the form of stock or cash. The general partner typically distributes any cash proceeds to the limited partners immediately and will distribute securities when they are free of most trading restrictions and have reached a reasonable and stable valuation in the general partner's opinion.

What are the income tax considerations of investing in a venture fund?

Venture capital investments usually span several years and do not generate ordinary income. Realized gains on the sale of these investments typically qualify for long term capital gains treatment. In fact, in cases where the LPs receive stock distributions, taxable gains are deferred until the stock is sold by the LP. Most taxable investors find the characteristics of venture capital investing to be particularly advantageous, as investments normally compound in value over several years free of income recognition until sale.

Why the B4 way?

By investing in a balanced group of companies, B4 provides the diversification which individual investors find difficult to achieve. Additionally, B4 devotes full-time to identifying and working with those deals which offer the highest risk adjusted potential to its investors.

Why do I need B4?

We have been involved in business management and the investment business for dozens of years, and venture capital funds specifically since 1998 because it was clear to us that individual and family investors had lost their access to remarkable venture capital deals. It has become simpler for top GPs to raise large sums from large institutional investors. From the outset, our goal was to provide access to the very best deals on behalf of our investors who represent a talented group, bringing more than just investment dollars to a venture fund. We do our best to function as a conduit between our investors and our companies, leveraging one another's skills and providing in-depth communications and education.

How do I invest with B4?

Call Our Dallas Offices at 972-233-2270. A general partner will answer all your questions.

How do I obtain venture capital from B4?

Call Our Dallas Offices at 972-233-2270. A general partner will answer all your questions.

 
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Venture Capital, def. venture capital is the illiquid investing in high potential, high risk business opportunities.

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