Venture Capital

Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT, software, etc. The typical venture capital investment occurs after the seed funding round as growth funding round (also referred to as Series A round) in the interest of generating a return through an eventual realization event, such as an IPO or trade sale of the company. Venture capital is a subset of private equity. Therefore, all venture capital is private equity, but not all private equity is venture capital.

In addition to angel investing and other seed funding options, venture capital is attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering. In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the company's ownership (and consequently value).

Venture capital is also associated with job creation (accounting for 2% of US GDP), the knowledge economy, and used as a proxy measure of innovation within an economic sector or geography. Every year, there are nearly 2 million businesses created in the USA, and 600–800 get venture capital funding. According to the National Venture Capital Association, 11% of private sector jobs come from venture backed companies and venture backed revenue accounts for 21% of US GDP.

It is also a way in which public and private actors can construct an institution that systematically creates networks for the new firms and industries, so that they can progress. This institution helps in identifying and combining pieces of companies, like finance, technical expertise, know-hows of marketing and business models. Once integrated, these enterprises succeed by becoming nodes in the search networks for designing and building products in their domain.

Read more about Venture CapitalHistory, Funding, Geographical Differences, Confidential Information, Popular Culture

Other articles related to "venture capital, ventures, capital, venture":

List Of Venture Capital Companies In India
... These are venture capital companies in India ... Accel Partners India Artheon Ventures Artiman Ventures August Capital Partners BlueRun Ventures DFJ India Epiphany Ventures Helion Venture Partners IFCI Venture Capital Funds India Innovation Investors ...
Venture Capital - Popular Culture
1997-2000 that parodied the industry, often by showing humorous exchanges between venture capitalists and entrepreneurs ... Von Goeben was a partner in Redleaf Venture Management when he began writing the strip ... Mark Coggins' 2002 novel Vulture Capital features a venture capitalist protagonist who investigates the disappearance of the chief scientist in a biotech ...
Burr, Egan, Deleage & Co. - History
... History of private equity and venture capital Early history (Origins of modern private equity) • The 1980s (LBO boom) • The 1990s (LBO bust and the VC bubble ... Deleage had come from Sofinnova Partners, a venture capital firm in France that he had co-founded in 1971 ... company managed over $700 million in assets and today is the direct predecessor of four venture capital firms with aggregate capital in excess of $5.7 billion Polaris Venture ...
St John's Innovation Centre - Alumni
... It is backed by Amadeus Capital Partners, 3i plc and Pentech Ventures ... Investors include Amadeus Capital Partners, Intel Capital, BASF Venture Capital, Siemens Venture Capital, Yasuda Enterprise Development, Morningside Technology Ventures, Bank of America Equity Partners, Nanotech ... The company raised almost £3million in venture funding between start-up in 2006 and end 2008 ...
Software Entrepreneurship - Funding - Venture Capital
... Venture capital is risk capital invested into a start-up company at its early stages ... Venture capitalists usually invest in start-ups that already have a relatively developed software product and some early sales ... Venture capital help offers a large sum of money and often assistance in managing the company ...

Famous quotes containing the words capital and/or venture:

    For mankind, speech with a capital S is especially meaningful and committing, more than the content communicated. The outcry of the newborn and the sound of the bells are fraught with mystery more than the baby’s woeful face or the venerable tower.
    Paul Goodman (1911–1972)

    It is not quite safe to send out a venture in this kind, unless yourself go supercargo. Where a man goes, there he is; but the slightest virtue is immovable,—it is real estate, not personal; who would keep it, must consent to be bought and sold with it.
    Henry David Thoreau (1817–1862)