|
Cost of Venture Factoring? Venture Capital vs.
Venture Factoring What is the real cost? You might have heard individuals talk about how expensive traditional factoring is compared to traditional bank lines of credit. |
|
| Of course it is; you
have a company with a young operating history, which hasn't turned a
profit yet. You can't expect a traditional bank to be able to make a
loan to a start-up that is losing money. But consider the real cost
of venture capital.
In the February 15, 1999 issue of Business
Week, the author, Linda Himelstein wrote an article about Benchmark
Venture Capital. She points out an investment that Benchmark made in
1997 when it bought 22% of Internet- auction highflier eBay Inc. for
$5 million. In February of 1999, that stake was worth about $2.5
billion. That is a whopping 49,900% return in less than two years,
she reports. |
|
