Venture Builder vs. Venture Capital: A Model Comparison

Venture Builder and Venture Capital: The Meaning Model

The meaning of Venture Capital

A venture capital is a form similar to a Private Fund, which is created and invested in a start-up company (Startup). Known as a tactic to invest capital in private companies with growth potential with the goal of increasing enterprise value through financial restructuring and operational restructuring.

Venture capital companies are often short in length, have not yet resonated, and are small in size. Besides, these units are also not eligible to get support from banks. To balance risks, investors will try to interfere in the company's operations and have certain rights. Some smart investors even claim to own a large number of shares so that they can easily control the situation and activities taking place on the company's side.

The notion of Venture Builder

Venture Builder is a business model that is becoming increasingly popular in the startup community. This is because it allows investors to focus on building new startups from the ground up, rather than investing in existing companies.

Venture Builder is an organization whose function is to create startups by providing the initial team, guiding strategy, and funding to develop products tailored to the needs of the market. The process from idea to market is important to a startup, and Venture Builder plays a key role in this process. This organization combines resources and experience to help reduce risk and increase the likelihood of success for early-stage startups. As a result, the startups created by Venture Builder often have strong growth potential in the future and are able to meet the needs of the market.

The difference between Venture Builder and Venture Capital

Right from the names of these two types, it is clear that the difference between Venture Builder and Venture Capital. If Venture Capital is understood as “venture capital” or “venture fund” when focusing on investing and supporting capital for projects, it is important to take care of financial issues otherwise you will be at risk. Having the necessary financial back-up for your new business is essential and inevitable, that's why many founders and business owners want to secure the capital and this is also the reason. characteristics when it comes to Venture Capital.

One of the key differences between venture capital and venture builders like U2U is their focus. Venture capital firms often invest in existing startups that have developed a product or service and are looking to scale. In contrast, venture builders like U2U focus on idea generation and working with entrepreneurs to develop new ideas from the ground up. U2U not only invests in startups but also creates them. They identify the most promising ideas and assemble the right team to develop them. This focus on idea generation can be extremely beneficial for startups, as it allows them to tap into the creative potential of their founders and develop innovative products that can make they stand out in a crowded market.

A key difference between venture capital and venture builders like U2U is the level of support and expertise provided to startups. Venture capital firms provide capital to startups, but they generally do not provide the same level of support and expertise as venture capital fund builders. U2U offers a wide range of services to their startups, including product development, marketing, and fundraising, which can be extremely valuable for budding entrepreneurs.

With the above main characteristics, people can see the basic difference between the two financial investment models above. Although Venture Builder has more outstanding features than the traditional Venture Capital model, it does not mean that the Venture Capital model is no longer effective. For businesses in which they have built themselves an effective operating system and only need capital support, the choice of Venture Capital will also be an appropriate choice. Thus, here we want to emphasize that the most suitable choice lies in the actual situation of your individual and business.

So which would be the appropriate choice? And why did U2U choose Venture Builder?

In order for everyone to have an appropriate choice, we will mention some advantages and disadvantages of the two types above:

For Venture Capital, the venture fund will pour a large amount of capital into the target business, acting as a strategic shareholder, and participating in decisions related to the company's operations. However, businesses that are invested in capital are often in the early stages, newly established and the ability to survive and develop long-term is still difficult. In addition, the venture capital stage is subject to risks in terms of governance, conflicts of interest between founders, and difficulty in managing capital flows; Therefore, the risk of losing capital is very high.

In addition to being able to support capital similar to Venture Capital, Venture Builder offers many more benefits. Most new entrepreneurs lack the experience, skills, and resources needed to run a successful company. They have a lot of benefits from a joint venture builder because they can share resources. This makes it easy for a new business to focus on growing its idea into a product even if it doesn't have the necessary infrastructure to launch or market the product. The partnership also gives new businesses more time to grow and stabilize without losing momentum. That's when they get to the point where they can hire their own staff and build their own team. This leverage is the most important thing.

It is from the above advantages that U2U has also chosen the Venture Builder model, creating a Venture Builder community where any individual or group can become an initial investor for startup projects right before both funding rounds or IPOs, just by participating in the ecosystem. Crowdfunding in the Venture Builder model is used as a resource to attract and finance projects developed on U2U's Blockchain platform. The benefit for investors is that the shares of each project have an increased value depending on the success (number of users, product value) of each of those projects.

With the success of the Venture Builder model that U2U has chosen, we also hope that businesses can choose the right path to reach the final destination.