Ep 371: What Is Venture Capital And How Does It Work With Jesse Randall, Sweater VC

Sep 9, 2022

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It’s pretty hard to be venture-qualified. It takes exceptional growth potential and the right company dynamics to earn the trust of venture capital investors.

In this episode, Jordan West and Jesse Randall talk all about venture capital. They discuss what it means to be a venture-qualified company and how these types of investments usually work.

Listen and learn in this episode!

KEY TAKEAWAYS FROM THIS EPISODE

To be venture-qualified is in the DNA of the business opportunity itself.
If the opportunity, technology and team don't have the right dynamics to be able to grow to the level of this type of investment, then you are not going to raise money from venture capital.
An Angel Investor is a wealthy individual that qualifies as an accredited investor and with that qualification, they can invest directly into companies. A venture capital fund aggregates individual contributions from lots of accredited investors and much bigger institutions. They pull that money into a fund and it is professionally managed by people.
Investors look at two big categories: (1) The product and the market opportunity itself & (2) The founding team and the capabilities of that team.
The difference between acquiring a company in a venture setting versus a traditional business setting comes down to the momentum and the size of opportunity you have.
There's a natural skepticism for something that seems too easy, so if you're doing something that's going to change the status quo, you often are going to get told "no" a lot.
Founders have the incentive to maximize the value of their company, but if you overvalue your company too much, the numbers don't work and you become not acquirable.
If you're going to get acquired, the acquiring company usually wants to see substantial growth opportunities after that acquisition to make it worth it.

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Today’s Guest:

Jesse Randall is the Founder and CEO of Sweater.
Sweater specializes in offering a venture capital fund that anyone can invest in.

Connect and learn more about Jesse Randall and Sweater VC here:
Website: https://www.sweaterventures.com/
App: https://apps.apple.com/us/app/sweater/id1572894118
(Currently only available in the US)
LinkedIn: https://www.linkedin.com/in/deviantstrat/

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