Structure analysis for NEA Essay Example | Topics and Well Written Essays - 750 words

Structure analysis for NEA - Essay Example President Barrack Obama has emerged revised policies to approach the challenges of VC fund flow structure of the country with appropriate revision of all existing norms to benefit the emerging companies. NEA environment of the liquidity of VC’s fund is described better by Porter’s Five Forces which identifies five different constraints in the fund governance of an emerging company. Firstly, the status of a company needs to be largely approved and of a huge size of operation to enter into NEA’s investment stream. Legal formalities of many of the entrants become complicated as they need to produce assurance of liquidity to the investors. Secondly, the superior power of investors over the company stands on the way of its operation. Investors are usually very selective about the choice and manner of business. This rigidness is somehow dissolved in the gradual course of longer term of the investment and illiquidity of the fund owing to low growth rate of the company’s income. Another force that suspends the VC’s fund flow is threat of substitutes. Thus the entrepreneur’s power is seized by the influence of investors as they are the decisive force behind the work. At the foremost stage, the VC fund flow was largely hit by the rapid growth in low flexibility and illiquidity which resulted in unethical entry of rival groups in the operation of similar activities. In the trial of accumulating funds, more than 650 Funded Companies, over 165 IPOs and as many as 265 Mergers and Acquisitions were drawn in favor of the venture capital stream. Thus formation of enhanced capital funding from various fields encouraged the process of forming top 100 companies aligned with an NEA found opportunity for employing over 300000 people and gathered their efforts positively generate $100bn in annual revenues. A great achievement of NEA stream was that it associated over 65 investment