Venture
Capital
Venture
capital is a type of private equity capital typically
provided by professional, outside investors to
new, high-potential-growth companies in the interest
of taking the company to an IPO. Venture capital
investments are generally made as cash in exchange
for shares in the invested company. A venture
capitalist (VC) is a person who makes such investments.
A venture capital fund is a pooled investment
vehicle (often an LLC or LP) that primarily invests
the financial capital of third-party investors
in enterprises that are too risky for the standard
capital markets or bank loans. Venture capital
can also include managerial and technical expertise.
Most venture capital comes from a group of wealthy
investors, investment banks and other financial
institutions that pool such investments or partnerships.
This form of raising capital is popular among
new companies, or ventures, with limited operating
history, who cannot raise funds through a debt
issue. The downside for entrepreneurs is that
venture capitalists usually get a say in company
decisions, in addition to a portion of the equity.
(Credit:
Wikipedia).
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