There are certain type of investments conventional bankers do not wish to finance. In particular, those that are not operational in nature and those that involve in high risk without adequate securities.

Examples of these include new start-ups, projects of long duration, businesses growing faster than accumulation of assets, businesses lacking in assets to be offered as securities, acquisition of companies or assets, takeover of companies, etc.

Under the above circumstances, it is more appropriate to seek venture capitalists to finance the transactions. By its very nature, venture capitalists take more calculated risk in assessing the viability of the projects and willing to fund such projects if they think that the returns on investment far exceed the calculated risks of the projects.

Without obtaining funds from venture capitalists, many good projects and business start-ups cannot take off, especially for companies gearing for a public listing or for technology companies like new Internet start-ups.

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