Venture Capital investments bear a significantly higher risk than investing on the Stock Markets. You will be investing in start-ups and companies that are still in the early stages of their growth.
This means no, or less, information is available on their past performance; there is no track record. Past performance is never a guarantee for the future, but is this case, the future is all you have.
An in-depth analysis of business plans is essential before making any investment. After that, a thorough follow-up on the development of the company and the performance of its management is needed.
These are time consuming activities, better left in experienced hands, that Charon Griffin will take care off.
The valuation of your shares is quite difficult and hard follow. Reporting cycles might be long and their process not yet fully professional.
Charon Griffin will be on top of the finances, in many cases consulting the companies in this field. So we do have first hard insights to at least establish the correctly calculated intrinsic or equity value. But this is commonly lower than a market value (like a listed share price).
For a proper market valuation, one looks at trends in profitability, realized returns etc. But this is data not readily available yet for young companies.
This might cause a problem when you try to establish a sales price or when talking to your tax authorities, but Charon Griffin will assist you with the negotiations.
The shares in a company funded with Venture Capital are usually not freely tradable. The whole idea of Venture Capital, is to provide young companies with the needed funds for their successful growth.
So the time horizon when investing in Venture Capital is long term.
If the company is successful, you will have no problem selling your shares; your fellow shareholders will be verry interested and probably even the company’s management (the initial entrepreneurs) will be happy to (re)gain control over “their” company. However, when the company is slow to grow, or simply unsuccessful, you’ll have hard time selling your shares.
Charon Griffin tries to ease all of this, by being sort of a, so called, market maker, where we can buy your shares and hold them until we find a new private investor for them.