Hopefully you have heard about Venture Capital (VC) and understand people can make lots of money. In our economy there is an important role for the VCs, but as a dividend buyer, this role is not necessary for you. VCs play a valuable role in nurturing start up companies, helping them to increase in size to meet the solutions needed in the marketplace. A good book about how VCs work is Mastering the VC Game by Jeffrey Bussgang published by Portfolio in 2010. Mr. Bussgang works for a VC firm and offers insights into what the objectives and expectations of the VC firm are. Anyone looking for money from VCs should read the book. One of the expectations is how much money a VC company needs to make from an investment into a company – they often look at 5 times investment. To to get there, the VC companies typically examine hundreds of companies, try to find the gem of an idea, the right fit for their company and nurture it, and then sell it to redo the same thing.

As dividend buyers, none of the VC firms investments meet the criteria of companies paying dividends. It is interesting to see how other players in the industry work and function. The dividend paying companies are prospective buyers of the companies, then they become divisions of larger companies, which is one of the methods dividend paying companies continue to pay dividends.

There are always more questions than answers, till the next time – to raising questions.