Friday, July 31, 2015

The Difference Between Sponsors & Venture Capitalists

Sponsors and venture capitalists provide financial support.


A sponsor is an individual or group that gives financial support, services or goods to an organization, individual, activity or event. A venture capitalist also gives material support but only to make a return. This person doesn't necessarily even want their name known. They do, however, want to see a direct profit.


Support


The sponsor doesn't make business decisions or have a direct stake in any returns. The only returns gained are indirect and a result of the association. A sponsorship is generally given when a business or individual believes in another business or individual and wants to lend their name to the other entity.


Goods


A corporate sponsor may provide a banquet room to a charity organization for its annual fundraising gala. A sponsor may give new helmets with its name on the side to a motorcycle team before a big event. A venture capitalist, on the other hand, may give goods in the form of advice to a business owner. A venture capitalist interested in an idea or start-up will lend keen business savvy to the receiver.


Monetary


A sponsor may pay for a musician to attend a prestigious music conference and thus be listed as a sponsor of that musician in a future concert program. Another way a sponsor could give monetarily is to fund a television show's meal budget. Then the sponsor's name could end up in the credits. A venture capitalist sees the idea for the television show and monetarily funds the production.


Payback


Sponsors earn their payback by having their name associated with the person, organization or event which they are sponsoring. Often, a sponsor's name is scrawled on the side of a piece of clothing, a car or in the ending credits of a production. This is like paying for advertising and name association. A venture capitalist sees payback when a return on investment comes around on a business in which they funded.

Tags: venture capitalist, their name, business individual, capitalist sees, event venture