Venture Capital Firms Face The Changing Economy Head-On

The ever-changing economy sends various and sundry warning messages to the business world. If all those messages were placed into a melting pot, the surviving message would be: Learn how to be the ‘comeback kid.’ The methodology is intimidating and tedious but so rewarding. It employs retrospect, prospect, introspect, strategy, innovative thinking and an effort to create diversification in a business that will generate multi-functional tuning and channeling to draw opportunities. The venture capital firms employ this methodology – at least most of it.

Here is some proof. An example of venture capital prospective, innovation, diversity and channeling is a recent announcement by a top venture capital firm that it will, in partnership, enter the energy market in Africa with the continent’s wealthiest person (believed to be 57-year-old Aliko Dangote). “Opportunities there are far greater than people thought years ago and the great explosion in private equity, if it’s going to occur anywhere around the world in the next couple of years, is[sic] probably going to be in Africa…” Carlyle Group Co-CEO, David Rubenstein

Multi-functional tuning and channeling by venture capitalists to draw other opportunities in Africa will surface for certain, and the prospect will be development and gentrification. Africa is a wealthy country dying to live. There are so many highly positive reverberations that this energy market venture will create thanks to a certain venture capital periscope.

Today, venture capital firms – because of evolving forms of investors in which they, no doubt, have had a hand in planting – while at the same time eyeing equity potential in distant places through periscopes – can opt to leave seed start-ups to investment groups like angel investors, many of whom operate on the same principles but with smaller equity pools. Many start-up companies that are or will be defined SMEs (small and medium enterprises), attract venture capitalists because they belong to individuals with specialized knowledge and/or higher education who have the ability to procure independent financing, family investment, or angel investing for seed money. That leaves the venture capital firms in the waiting room for SMEs, willing to fund subsequent new and larger distribution centers or advanced manufacturing plants; to provide funding to replace some equipment with more sophisticated equipment or technologically sophisticated artificial intelligence to help businesses run more smoothly. Investing at this juncture in an SME is low risk with potential high returns on investment. Venture capital funding at this level by companies like Advantage Capital Partners has it other rewards. SMEs are able to strengthen and build on their workforces which mean job opportunities now and the future.

For the venture capital industry, this is economic hand wrestling that needs to be bottled.