For some entrepreneurs, they have excellent ideas to set up new businesses in the non-technology areas, such as retail, commercial services or franchising opportunities. There are many venture capital firms or private equity firms that are specialized in these non-technology sectors.
In many cases, some venture capital firms prefer to invest in non-technology businesses as they are easier to understand; and also have consumers and customers ready to try out these businesses. For private equity firms, many are looking to acquire existing family business (family succession) and expand them into next phase through growth or mergers & acquisition.
What kind of these firms have invested in "traditional business sectors"?
1. Retail sector - this has been one of the largest sector invested by venture capital firms, they have invested in young designers, they have invested in new retail concepts or providing capital for marketing or manufacturing facility.
2. Franchising - we also notice this sector has attracted a lot of capital from venture capital firms - both food and non-food related franchises. Franchising is a good model to expand business quickly without substantial capital expenditure.
3. Manufacturing - there are a number of firms specialize in providing financing for manufacturing facilities in the United States, this includes special situation financing such as expansion or mergers & acquisition. Manufacturing is one of the most active sectors invested by businesses, as this often relates to expansion capital or acquisition capital, which are preferred by many private equity funds.
4. Professional Services - another popular area invested by venture capital firms, these include legal firms, accounting firms, medical clinics or other services like pet care or funeral homes. These are low-capital intensive and scalable businesses, which are attractive from investors.
5. Businesses with International Marketing opportunities - recently, some venture capital firms have invested in several agricultural companies in US, Australia and Canada as examples, as their products can be exported into emerging markets.
In many instances, investors are very interested in succession business opportunities (transferred between the family members), and these opportunities are often related to non-technology industries. Many traditional businesses have established customer base and branding, many also have strong market dominance in their home market, this also means higher barrier of entry for competitors in their home market or industry.
So if you are setting up a business or require capital for your non-technology related businesses, do consider venture capital or private equity firms as potential funding sources, and these include international investors.