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Venture management is an innovative and challenging business practice, referring to the undertaking of the risk that is involved in experimenting with new business opportunities. It generally involves launching an entirely new business product, service, or practice. Venture management might also focus on introducing some innovation in existing products or practices.
New ventures can be undertaken in any area, such as a boutique or restaurant, or even in bigger industries, such as oil, cement, or steel. A venture management decision is generally considered on the basis of new technical innovation or customer-driven ideas. These provide a road map for ambitious entrepreneurs to try out the new markets by exploiting the needs and demands of the customer.
The basic motive behind any venture management program is to look beyond the existing business uncertainty in a particular market. This is typically done by experimenting with new ideas and business actions. The primary aim is then to enhance entrepreneurial activity by exploiting new areas of growth.
The novelty of a new business setup calls for a capable management to foresee and calculate the upcoming milestones. This makes the job responsibility of a venture manager very challenging and demanding. Typically, venture management has its share of risks, but that makes the probability of profits highly lucrative for the shareholders who sponsor such projects.
The strategic planning for a venture should be based on a careful analysisto measure Strengths, Weaknesses, Opportunities and Threats (SWOT) associated with a project. The SWOT analysis helps an organization to carefully evaluate the internal and external factors that might contribute in making a proposed project a success or a failure. If the prospects are promising enough to bring a sound profit margin then venture managers undertake the responsibility to accomplish the pre-set goals and objectives, within a given set of time frame.
The first step when launching any kind of business project is to generate capital and finance. Generally, organizations or individuals form alliances to raise capital through lending or leasing. In the case of venture management, project funding is normally generated by raising venture capital (VC). VC is a type of private equity investment that comes from individuals with high net worth or institutions that provide venture management services.
A crucial element in any business venture is effective investment and financial management. An individual handling a venture, therefore, must be well versed in the existing financial tools.