One of the things that have least discussed during this crisis, has been without doubt the role of the companies - I can hardly call them "venture capital companies. In my experience I have to recognize these companies are many positive aspects. They highlight the enormous changes that have resulted in many companies with entry into the capital in each of these shareholders (change in management model to support the internationalization of the company, improving processes, increase organizational skills and other many). There have been many companies - many of them family owned, which would not have survived had it not been for the emergence of private equity in the shareholding and management of them. On the other hand, Venture Capital companies among its teams cherish people with great talent and professionalism can themselves often be at the forefront of leading companies and achieve great things.
The question I ask myself, and it is not easy to answer is: What will be the role of Risk Capiptal remainder of crisis? and when it begins to recall what is going to be a venture capital companies?. A few months ago I read an article in a famous U.S. magazine that asked something similar, but linking it to the arrival at the White House Barack H. Obama. The columnist concluded by saying that there will be many regulatory changes for private equity because more of the trusted men of the new president of its Chicago environment have been linked or are linked to these companies.
venture capital firms generally have to raise its investments as follows: I give up my capital for the development of a company that in principle is viability and growth and for that assignment (usually limited in time) I will pick up some earnings estimates for a certain amount - albeit tied to company performance, "in times of economic boom the game are clear and usually everyone just getting some extent its objectives (the company grows and gets results, more professionalized, the internationalization where appropriate, and venture capital gets his profit.) But some problems in the past has been that sometimes the results have not been sufficient to meet venture capital firms and this leads to discrepancies in the model, the private equity are required to report to people who have "banked" their capital returns lower than expected. Many times he has given money to these companies do not know where it is invested and thus expects that those promises of benefits for the assets transferred is the one that in its day negotiated. This complicated three-way relationship strength to some extent venture capital companies to "force" companies to achieve results at times in the short term results and even undermine their viability in the medium or long. I believe that private equity could make some minor changes that surely help now and in future also have a more stable economic environment and certainly more predictable. I can think of among others the following:
- Increased transparency from private equity investors and their capital where they go.
- Increasing involvement of company executives Venture capital operations and daily operations of enterprises.
- Increased attention to the vagaries of the sectors where they operate and long-term view of investments.
There will be many more, but eventually tries to put a little more down to earth business in which it operates, I am sure that with the talent that exists in these organizations will make those changes necessary for the improved performance of the companies where they are present and as a result of investors they represent.
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