For some entrepreneurs, they have great ideas for establishing new businesses in non-tech areas such as retail, business services, or franchise opportunities. There are many venture capital firms or private equity firms that are specialized in these non-tech sectors.
In many cases, some venture capital firms prefer to invest in non-tech businesses because they are easier to understand; and also have consumers and customers ready to try these businesses. For private equity firms, many are looking to acquire existing family businesses (family succession) and expand into the next phase through growth or mergers and acquisitions.
What kind of these companies have invested in “traditional business sectors”?
1. Retail Sector – This has been one of the largest sectors invested by venture capital firms, they have invested in young designers, invested in new retail concepts or provided capital for marketing or manufacturing facilities.
2. Franchising – We also noticed that this sector has attracted a lot of capital from venture capital firms, both food-related and non-food franchises. Franchising is a good model for rapidly expanding your business without substantial capital expenditure.
3. Manufacturing: There are several companies that specialize in providing financing for manufacturing facilities in the United States, this includes financing for special situations, such as expansion or mergers and acquisitions. Manufacturing is one of the most active sectors in which companies invest, as it is often associated with expansion capital or acquisition capital, which are preferred by many private equity funds.
4. Professional Services – Another popular area that venture capital firms invest in, these include law firms, accounting firms, medical clinics, or other services such as pet sitting or funeral homes. These are scalable, low-capital-intensive businesses that are attractive to investors.
5. Companies with international marketing opportunities: Recently, some venture capital firms have invested in various agricultural companies in the US, Australia, and Canada, for example, as their products can be exported to emerging markets.
In many cases, investors are very interested in succession business opportunities (passed between family members), and these opportunities are often related to non-tech industries. Many traditional businesses have established a customer base and brand, many also have strong market dominance in their home market, which also means a higher barrier to entry for competitors in their home market or industry.
So if you’re setting up a business or need capital for your non-tech businesses, consider venture capital or private equity firms as potential sources of funding, and these include international investors.