These are a subset of buyouts and involve buying the control of a lick company. Two kinds of inputs are required in a turnaround namely, money and management. The VCIs have to identify good management and operations leadership. Such form of venture capital financing involves medium to high risk and a time frame of three to five years. It is gaining widespread acceptance and increasingly becoming the focus of attention of VCIs.
To conclude. venture capital firms finance hath early and later stage investments to maintain a trade off between risk and profitability. In early stage investment particularly start up in high technology industries, the technology is often untried at a commercial level of operation, market is undeveloped and potential competition is unknown as the product itself is new. Apart from the evaluation of the technology and the likely market, the most important factor to be considered by VCls is the capability of the promoter entrepreneur to implement the project with a reasonable chance of success.
In later stage investments, the technology has already been tried out commercially, the products have been introduced in the market and the business entrepreneur has a track record which is closely examined by the VCIs.