VENTURE AND PRIVATE CAPITALIST AND ITS RISKS

Venture or Private Capital is an important source of funding for start-up and other companies that have a limited operating history and don't have access to capital markets.

A Venture Capital firm (VC) or Private Equity Investors (PEI) typically looks for new and small businesses with a perceived long-term growth potential that will result in a large payout for investors.

A Venture Capitalist PEI is not necessarily just one wealthy financier.

Most VCs or PEIs are limited partnerships that have a fund of pooled investment capital with which to invest in a number of companies.

They vary in size from firms that manage just a few million dollars cash worth of investments to much larger VCs that may have billions of dollars invested in companies globally.

VCs and PEIs may be a small group of investors or an affiliate or subsidiary of a large commercial bank, investment bank, or insurance company that makes investments on behalf clients of the parent company or Private Investors.

In any case, the VC and PEI aims to use its business knowledge, experience and expertise to fund and nurture companies that will yield a substantial return on the VC or PEI's investment, generally within three to twenty years.

Not all VC and PEI investments pay off. The failure rate can be quite high, and in fact, anywhere from 20 percent to 90 percent of portfolio companies may fail to return on the VC or PEI's investment.

On the other hand, if a VC or PEI does well, a fund can offer returns of 300 to 1,000 percent.

In additional to a portion of the equity, a VC and PEI expects to have a say in how its portfolio company operates. Ideally, the VC fosters growth at the company through its involvement in managerial, strategic, and planning decisions.

To do this, the VC and PEI relies on the expertise of its general partners who may be former CEOs, bankers, or experts in a particular industry. In most cases, one or more general partners of the VC take Board of Director positions at a portfolio company.

They may also help recruit key executives to the portfolio company.

It's important to do your homework before approaching a VC for funding, to make sure you're targeting the right potential partner for your business needs. Not all VCs and PEIs invest in 'start-ups.'

While Venture Partners may have to invest small amounts of "seed" capital for very early ventures, many focus on early or expansion funding while still others may invest at the end of the business cycle, specializing in buyouts, turnarounds, or re-capitalisations.

Since RHC is taking the risks to provide Private Funders, Management Team, High Technology, Marketing, Promotion and Advertisement of the business ventures, therefore certain basis investment criteria, terms and conditions are set forth to construe a sound and fair joint-venture partnership.

Funding a joint-venture with an existing business, business buyouts, finance re-structure, ailing business, turnaround, re-capitalisations or a newly start-up business

1. The joint-venture partner must provide relevant information that the current business is still viable, healthy and not in the verge of going Bankrupt or under Receivership by Laws;
2. To conduct a Due Diligence Report;
3. To provide business expansion blueprint and feasibility report and type of business;
4. To conduct a Risk Analysis Management Report;
5. To provide Financial Statements Report of the current Company situation;
6. Propose equity participation between the Venture Capitalist and current Company;
7. Propose an investment fund require for the financing of re-structure or expansion project of the current business;
8. Resume/Profile of the existing Directors/Shareholders;
9. To sign a non-circumvention and non-disclosure agreement before any discussion or business meetings;
10. To attend meetings and discussions with our RHC Team and the Venture Capitalist at own discretion and expenses;
11. To agree to the "Terms and Conditions" before our introduction of the "Private Investors" in a close door meeting.