Entrepreneurs, like actors, singers or dancers, often dream of being "discovered." For the entrepreneur, the dream is about being discovered by a venture capitalist willing to bet the farm on the entrepreneur's product and skills. For most small business entrepreneurs, this is and will always remain just a dream. But for a few, there really is funding available from venture capital. Venture capital can be debt or equity or a combination of the two. Sometimes it is provided to start up ventures. More often, it is available to existing businesses which have reached a certain level of history and performance. If there is a typical venture capital recipient, it would probably be a company 3-5 years old which has grown and now needs to reach that next level but is stretched a bit too thin for conventional financing and/or needs funding beyond the limits of traditional government related financing programs. The company needs to show a solid product line, skilled management and the ability to grow to the point where the venture capital provider can exit.
Most venture capital providers are looking for a minimum return which can range from 10% to 50-100% or more. The return will depend on the type of investment, the length of anticipated investment, the amount of involvement required from the venture capital firm in terms of board involvement and/or management, the risk factors, etc.
One type of venture capital investor is the SBIC- Small Business Investment Company- a program under the US (federal) Small Business Administration. These entities are licensed by SBA and permitted to take advantage of certain leverage available from SBA - thus permitting the investors to expand their lending/equity investments multifold beyond initial partners' capital in the venture capital firm.
SBIC's as well as other venture capital firms tend to specialize in specific industries-due to the expertise of the owners of the venture capital firm. Long Island's major venture capital firms are represented in the LI Venture Capital Group, hosted by Hofstra's Business Development Center. For a list of SBIC's in your industry group or generalist SBIC's, you can log on to the sba.gov site and scroll down to SBIC. Or you can go to the site of the national association of sbic's - NASBIC.org.
One piece of cautionary advice - before you run out in search of venture capital-talk with your accountant, attorney, financial advisor, banker find out if your financing needs are best met by venture capital as opposed to conventional bank financing or traditional government programs. Venture capital is expensive - when needed, expensive is appropriate - but, most of your small business needs will be best met by sources other than venture capital.