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Disadvantage of Venture Capital
1. No confidentiality - Generally VC treat information confidential . But they refuse to sign non - disclosure agreement due to the legal ramification of doing so.
2. Quick Liquidity - Most VC seek to realize their investment in the company in 3 to 5 years .
3. Complex Process - It is a lengthy and complex process which needs a detailed business plan and financial projections . Until and Unless the VC are properly satisfied with business plan , whether or not it will succeed in the future , they won't exist.
4. Loss of Control - VC firms add one of their team members to the Management team , while this is usually done for ensuring the success of the business , it can also create internal problems .
5. Loss over decisions - Another big problem faced in VC funding is that one will have to give up many key decisions on how the company will process or operate.
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