Specialty Funds . . .
are venture capital firms that invest their money only
in companies or products that fall within an identified industry or
field of endeavor. For example, a specialty fund might invest only in
ventures which offer a product or service directly, but not
necessarily exclusively, related to the needs of the electric and gas
utility industry. Another fund might focus exclusively on ecommerce
or medical technologies.
Specialty funds use their industry focus to help
attract investors and give them an edge in identifying promising
companies in their chosen industries. By specializing, they are able
to develop industry-specific expertise that cannot only help them
understand and identify the potential of a new company in the
industry, but that can also help them assist that company after they
have made their investment.
Spending time to identify specialty
funds in his company’s industry can help an entrepreneur raise
capital. Even funds that are not specialty funds tend to specialize in
industries or stages of financings. Identifying the tendencies of
investors can help a company focus its fund-raising activities and
increase its changes for success. See:
Venture Capitalists for some
sources containing listings of investors. See also: