Venture Capital Winners and Losers: How to Stop the Bleeding from a Struggling VC Investment and How to Capitalize on Success

Venture Capital Winners and Losers: How to Stop the Bleeding from a Struggling VC Investment and How to Capitalize on Success

While venture capital investments can vary in countless aspects, one thing remains the same: They’re unpredictable.

Risk-taking is at the core of venture capital, and sometimes that risk can pay off in a big way. Other times, it can result in a problematic situation that requires a concerted effort to turn things around. So how do you handle these two extremes – restoring a struggling, but possibly valuable investment, and exploiting a highly successful one?

Let’s look at both ends of the spectrum separately.

The losing investments 

I recently had a venture capital client who had invested in a small software company that was essentially bleeding cash. The business had been in his portfolio for five years and had real customers and revenue, but profitability was lagging. The investor didn’t want to shut it down, but he also didn’t want to continue writing checks to barely keep it above water.

The company clearly had value, but the investor needed to know exactly how to derive that value – and how to stop the bleeding.

Although a so-called “purgatory” investment like this might have the potential to be valuable in the future, investors tend to view it as a drain on their resources, especially if there’s no clear end in sight. A decision needs to be made, with the investor’s choice of action ultimately tipping the tables toward success or failure.

When a venture reaches this point, investors have four options:

1. Sell the company: Ideally, you would sell the company to a strategic buyer who is interested because of the value the company adds to their own organization. This type of buyer can be hard to come by, but they are not infrequently found among a business’s competition or current customer base. Approaching possible buyers in this arena can be

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How to Choose a Free POS System

How to Choose a Free POS System

  • The price of a point-of-sale (POS) system often directly correlates to the features, limitations and convenience it offers.
  • A free POS system can save you money and is ideal for small businesses that rarely process card payments and don’t need advanced POS software functions.
  • Most free POS systems are tied to high transaction fees, limited features or multiyear processing contracts.
  • To choose a free POS system, analyze your budget, industry, business size and the feature you need.

A point-of-sale (POS) system is an integral component for most businesses, and it’s challenging to find the system that’s the right fit for your company’s specific needs. Since POS software and hardware are available in various combinations and price points, business owners can pick and choose what works best for them. Sometimes, that best option is free of charge.

However, the age-old saying “you get what you pay for” rings true more often than not – and POS systems are no exception. Although using a free POS system to complete your consumer transactions may seem like a great option, it has its own set of pros and cons.

John Moss, CEO of English Blinds, said business owners should be wary of the limitations and additional fees that can come with a free POS system.  

“There are free POS systems in as far as there are systems you can get in place without any upfront cost, purchase price, or set monthly fee, but these typically cost more per transaction or have limitations in place in order to counteract this,” Moss told business.com. “There is no such thing as a free lunch, after all, just different ways of paying for things.”

It is essential for business owners to evaluate the benefits and limitations of free POS software before jumping into a plan that may

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Credit Card Processing Scams to Avoid

Credit Card Processing Scams to Avoid

Credit card processing is essential to modern small businesses. Working with a credit card processor allows you to accept debit cards and credit cards as payment, both at the point of sale and online. As more customers go cashless, credit card processing is increasingly important; it’s no longer a matter of choice, but a necessity for most businesses.

However, when choosing a credit card processing company to work with, there is more to keep in mind than rates, terms and conditions. You should also stay on the lookout for one of the many scams and shady practices that plague the industry.

Here are some of the most common scams in the credit card processing industry and how your small business can avoid falling victim to them.

Editor’s note: Looking for the right credit card processor for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

 

 

Common credit card processing scams

When you are researching credit card processors, there is a lot to keep in mind. Choosing a viable processing partner is a complicated and labor-intensive process that requires you to study multiple pricing models and clearly understand your potential processor’s terms and conditions.

The process is made more burdensome by the risks of encountering fraudulent practices or scams designed to rip you and your customers off. But as G.I. Joe said, knowing is half the battle. Awareness of the most common types of these scams can protect you from stumbling into a bad situation.

Low-risk wholesale processing

One of the most common scams you might encounter involves an unsolicited offer of “wholesale processing,” typically accompanied by a message that you’ve been designated a “low-risk” business.

You might receive a message from a credit card processing sales representative that says something like, “Your

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How to Use a Credit Card to Finance Your Small Business

How to Use a Credit Card to Finance Your Small Business

Financing a small business can be approached from multiple directions. It’s important to understand what the market offers you and how to use those deals to their full potential because this initial stage of your company’s development is crucial to its long-term success.

A credit card is one of the more popular methods for financing a small business, but it comes with a few caveats that have to be considered carefully. Most importantly, it’s not the exact same thing as a small business loan and it comes with some different implications that you’ll need to be aware of.

The basics of using a business credit card

Using a credit card to finance your small business should be treated no differently from a regular loan in that you have to think carefully about your ability to repay the money and keep your balance in check. However, credit cards can provide you with a lot more in the way of floating resources. They make it easy to get a smaller amount of cash when you need it, helping you keep your balance in the positive while you’re waiting to get paid. If some of your clients are late with their payments, it can affect your operations down the line. But that doesn’t have to be the case if you can cover the negative balance with the help of a credit card.

In fact, most modern businesses rely heavily on perpetually-open lines of credit. This is valid for pretty much all sectors of the market, including larger companies. With that in mind, you should definitely not be afraid to rely on credit lines to supplement your cash flow. In fact, it might be the best option you have in many cases.

Consider alternative funding sources

You should also consider your other options

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Accepting Credit Card Payments on a Mobile Phone

Accepting Credit Card Payments on a Mobile Phone

The ability to accept credit cards and debit cards at the point of sale (POS) is a must for small businesses today. In an increasingly cashless society, customers expect to pay for goods and services with their cards. An in-store ATM doesn’t cut it; customers want quick and easy payment options.

Unfortunately, investing in a credit card terminal or POS system can be expensive. For some small businesses, these systems might be overkill. Luckily, there are payment processors that allow you to accept credit card payments using your phone. All you need is a mobile application and a credit card reader.

 

Editor’s note: Looking for the right credit card processor for your business? Fill out the below questionnaire below to have our vendor partners contact you about your needs.

 

 

Can I take credit card payments on my phone?

You can accept credit card payments on your phone by partnering with a payment processor that offers mobile credit card processing solutions. Some of the most popular brands are Square, SumUp and PayPal, each of which offers mobile credit card readers and pay-as-you-go terms specifically for mobile credit card processing.

Generally, you download an application from the processor and provide basic information about your business to sign up for an account. Many processors will send you a free mobile credit card swiper so you can begin accepting payments, but you should order a mobile credit card reader that accepts chip cards as they deter counterfeit fraud, and using them protects you from liability if you unknowingly accept a counterfeit card.

Mobile credit card readers connect to your phone either by Bluetooth or through your phone’s headphone jack. When you accept card payments, the transactions are encrypted and transmitted to the processor, and no sensitive card data is stored

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