The Real Goal of Corporate Finance
Those of us in corporate finance and venture funding can easily forget what we’re there for.
We can effortlessly see that it does not matter how the cash is raised; there must be a fair exchange for the team, for the technologies, and for the money.
The actual objective of corporate finance would be to see that the company has much more than enough cash to achieve its objectives.
Now that we say it, we know it could not be anything else. What else could it be?
In seeing this, we know immediately what venture funding is not.
Actual venture capital does not deprive the business of funds so it may be bought for a song later on, taking the work of the team for small or nothing.
Venture capital is not loading the entrepreneurial team down with straight jacket agreements.
It is not setting a inexpensive value on the company so you are able to make a huge gain out of a share of the business that ought to belong to the people that daily contribute their sweat.
True capital would not maintain control of the business to wrest manage from those executives who know best how to manage. Capital is not there to know much better than management. Management, not capital, is on the firing line and best knows how you can attain the objectives of the business.
True corporate finance is seeing that the company has more money than it needs. True venture capital motivates and encourages the team. True venture funding values the team and acts accordingly. Accurate venture capital is component of the team.
True venture capital is much more than capital. It is a partnership of equals; it’s support that is much more than financial; it is part of the team that fights its way forward through the perils and battles which are business.
Only true venture capital is entitled to share in the rewards of the team.
When a business is adequately financed, the entrepreneurs and their team are not deprived of enough pay to support themselves and their families. They are well rewarded for their work by industry standards. They are not paid small or absolutely nothing so the investors can live high.
When a business is adequately financed, it has sufficient reserves to give it confidence to face any contingency.
When a business is adequately financed, it has the cash to acquire the resources it requirements to win in a competitive marketplace.
Actual finance gives these issues towards the business.
The actual goal of any venture capital would be to see that the company has much more than sufficient cash to attain its objectives.