A venture capital consultant is an investment professional that seeks to match prospective investors with the right venture capital opportunity. This type of consultant may be a company or an individual, and may either take on businesses that are seeking venture capital to fund an upcoming project, or investors who are looking for investments in new start-up companies or established companies that are considering expansion. In some cases, the venture capital consultant will take on clients of both types, helping to forge relationships that are ultimately profitable for all concerned.
When a venture capital consultant is focused on finding opportunities for investors, the process often includes developing a profile of each investor’s ability to participate in a given venture. This includes not only the amount of money that the investor can reasonably afford to invest, but also the investor’s personal comfort level with the degree of risk involved. The idea is to find venture capital opportunities that present what the investor is likely to consider a reasonable amount of risk for the return potential connected with the venture, while also making sure the amount of the actual investment is within the means of the investor.
Often, the focus of a venture capital consultant is on assisting a start-up company to find investors who are willing to put up the venture capital to help the business launch and continue operations until it begins to generate enough profit to stand on its own. As part of this process, the venture capital consultant will seek to help the new company develop and refine the documents many investors want to see before committing to the project. This includes the development of a solid business plan, and organizational structure for the business venture, and possibly helping to design either a non-public offering or initial public offering to help generate the needed growth capital. The exact scope of the consultant’s efforts will depend greatly on the needs of the client and what he or she wants to gain from the consulting.
A venture capital consultant may be compensated in several different ways. One of the more common approaches involves the tendering of a flat fee once the consultant has successfully completed his or her responsibilities to the customer. Another approach bases the compensation on a percentage of the capital that is collected as part of the venture capital campaign. In some cases, the venture capital consultant may be placed on a retainer and receive a monthly stipend for his or her continued services throughout the company or project launch.
