Venture leasing, also called sub-prime leasing, describes a form of leasing that specialized venture leasing firms offer to start-up companies. Venture-backed companies often operate in a high growth driven niche environment. Besides normal office equipment and hardware, they usually require custom-made high-tech machinery.
With limited sources of financing in the start-up phase, buying such equipment is difficult for most of these companies. Leasing the equipment offers the advantage of not having to raise extra capital and optimizing the use of available cash flows. Traditional leasing, however, is difficult as newer companies often lack the required credit worthiness.
In the absence of material securities, venture leasing companies usually work closely together with venture capital firms. Together they elaborate a leasing structure considering venture capital aspects such as the business model and the market potential of the company.
With its experience the firm is able to expedite the leasing process and provide further assistance to the start-up companies. The firms may, for instance, offer the lesser used office equipment and hardware from their own stock on a reduced cost basis.
To compensate for the lack of security, the venture capital lessors generally demand an equity option in the company equal to the risk amount they take. Most venture leasing companies actively market themselves and can be accessed via trade associations or the Internet.
With limited sources of financing in the start-up phase, buying such equipment is difficult for most of these companies. Leasing the equipment offers the advantage of not having to raise extra capital and optimizing the use of available cash flows. Traditional leasing, however, is difficult as newer companies often lack the required credit worthiness.
In the absence of material securities, venture leasing companies usually work closely together with venture capital firms. Together they elaborate a leasing structure considering venture capital aspects such as the business model and the market potential of the company.
With its experience the firm is able to expedite the leasing process and provide further assistance to the start-up companies. The firms may, for instance, offer the lesser used office equipment and hardware from their own stock on a reduced cost basis.
To compensate for the lack of security, the venture capital lessors generally demand an equity option in the company equal to the risk amount they take. Most venture leasing companies actively market themselves and can be accessed via trade associations or the Internet.
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| Venture Leasing |
