As described in earlier articles that there are many avenues for taping capital for your business- one of which is from Venture Capital Companies (VCC).
Recently reported in The Star (13/1/07) are some good practical advices from the Malaysian Venture Capital Management (Mavcap) CEO Norazharuddin Abu Talib to entrepreneurs who wish to take in  VCC as partners in their business:

• VCC are not banks who charge interest but are  institutional investors who requires transparency, accountability and governance from their partner;

• VCC have processes in place and entrepreneurs need to respect or adhere to these processes for example, on-time arrival during board meeting, etc. Hence these “new” entrepreneurs need to be more matured when dealing the JVC as it can provide good strategic and operational side of the business to the entrepreneurs;

• as CEO of the new company, the entrepreneur need  to learn to be a manager. The entrepreneur can no longer just focus on its on little area of expertise. He or she needs to learn to manage all the divisions of the new company for example,  if the audited accounts are not prepared in time, it is the director, rather than your accountant, who is responsible. If the entrepreneur do not want to be managers then he needs to step aside and appoint a professional to do the job;

• need to switch from thinking as an employee to that of a business owner. Where before the priority may have been in negotiating for yourself the best possible package with all the trimmings, now your priority is in seeing that your company succeeds; 

• starting a company is very difficult and strenuous. Therefore there is the need to work very hard, make all the sacrifices necessary. It doesn’t matter what you were getting before as an employee of a high-powered consultancy or merchant bank. If you want lifestyle without liability, you’re probably not cut out to be an entrepreneur:

• be alive to the risk involved; as good as your idea is it may not work. Learn how to fail gracefully. If you dig in your heels and refuse to do the necessary such as winding up the company when it’s clear that there is no point in going on, it will serve as little other than a time-wasting device and believe me, nothing that a court order wouldn’t cure;

• needs to take personal responsibility. It may be tempting to blame everyone else for your failure, but while those listening may sympathise, they will not respect you for it. An entrepreneur may be many things but he or she is not a victim. Other investors will be watching very closely to see how you carry yourself. Your behaviour at this point will determine whether you will be able to raise money for future schemes.

• Mavcap has  obligations to its shareholder, in this case, the Government hence the fund is not a grant but a loan, which needs to be paid back within a specified time frame. 

If you found this post useful, keep updated with future posts by subscribing to FMAccounting (for free) through RSS or email.

Related Entries

• Tax Incentives For The Venture Capital Industry
• Main Content Page on Category On Venture Capital