资助是为特定目的向个人或组织提供资金的行为。风险资本是为初创公司提供的资金，被认为具有长期增长和未来(Gompers和Lerner 2004)。创业公司利用这种风险资本融资，尤其是在他们无法进入资本市场的情况下(Cochrane, 2005)。迈达斯触摸科技有限公司(MTT)使用优质材料和第三方软件生产高端智能手表。MTT计划向VCI (Victoria Capital Investment Ltd)投资1000万英镑。市场研究显示，2015年全球智能手表销量将达到17.4亿英镑。该行业预计将在2019年迅速增长至9830万英镑。MTT的发展潜力是巨大的。MTT正面临一个难题，即是否最好从VCI寻求投资。迫切需要分析这个过程中涉及的所有内在因素，以确保MTT在这个过程中受益。本分析的目的是为Midas Touch Technologies (MMT)提供一份咨询报告。他们正在考虑是否向风险投资公司寻求资金，并要求提供一份报告，以告知他们的决定。下面将详细讨论对这一贸易涉及的各个方面的关键分析。
Funding is an action of providing money to an individual or organization for a particular purpose. Venture capital is the money provided for Startup Company that is perceived to have long-term growth and future (Gompers and Lerner 2004). Start up companies utilize this venture capital funding esp. in cases where they do not have access to capital markets (Cochrane, 2005). Midas Touch Technology Ltd (MTT) produces high-end smart watches using premium materials and third party software. MTT intends to approach VCI (Victoria Capital Investment Ltd) for an investment of £10 million. Market research suggests that global smart watch sales would be £1,740 million in 2015. The industry is expected to grow rapidly to £9,830 million in 2019. It is touted that there will be immense potential for growth of MTT. MTT is in a conundrum if it is best to seek investment from VCI. There is an imperative need to analyze all the inherent factors involved in this process to ensure that MTT is benefitted in the process. Purpose of this analysis is to produce a consultancy report for Midas Touch Technologies (MMT). They are deliberating whether to approach a venture capital firm for funding and have asked for a report that will inform their decision. Critical analysis of the various facets involved in this trade is discussed in detail in the following.
1. MTT and VCI venture capital critical analysis
Apart from this the investors are bearing the inherent risks involved in the process. In this scenario repayment is not really expected. Business expertise can be gained in this process. MTT is a relatively new company they can gain a lot of insights about how businesses are run if they have form association with VCI. This can also lead to formation of a number of new contacts and business opportunities for the companies. There is a clear exit strategy that is defined and the financial risks for MTT are minimal in this situation.
However this does not mean that venture capital are fully advantageous for all the stakeholders involved in the process. There are also a number of key disadvantages for the company if they are not careful in this process.