Source | LinkedIn | John Boitnott | Writer at Entrepreneur Media, Inc.com and Readwrite.com
In the last several months there’s been an increase in “supergiant” venture capital funding deals ($100 million or more) In August, Boston-based security firm Cybereason raised a $200 million Series E round. More famously, toward the end of last year bike and scooter-share company Lime raised $335 million in its Series C round. The examples go on and on. And, VC funds are on the rise overall in the United States, according to industry resource Crunchbase.
With these trends, it’s sometimes easy to overlook the fundamentals. What is venture capital? When is it a good fit for your startup? Do you need to be located in San Francisco or Silicon Valley to get it? (That answer is “no” by the way.) How do you know whether venture capital funds are better than, say, a traditional commercial loan or private equity?
It’s important to do your due diligence when it comes to VC firms, angel investors and the like. Making a mistake in this area can prove expensive for years to come. Some venture-funded companies have actually sought to part ways with their venture capital firms. You should make sure you’re familiar with the basics before diving into the venture capital pool, so let’s start with the most basic question: