venture capital

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Venture capital

An investment in a start-up business that is perceived to have excellent growth prospects but does not have access to capital markets. Type of financing sought by early-stage companies seeking to grow rapidly.

Venture Capital

The provision of funding for a start-up. For example, suppose a company with little access to capital is attempting to open a new market or access an old one with a better product. It may not be able to receive loans, either because of an unproven track record or because it is already significantly in debt, and it may have exhausted financing from family and friends. Venture capital allows this company to begin and build upon its operations by providing necessary funding. Usually, the provider of venture capital takes equity in the company in exchange for the money. Venture capital firms may also provide needed expertise in how to run a business than can help the start-up become successful.

venture capital

A pool of risk capital, typically contributed by large investors, from which allocations are made available to young, small companies that have good growth prospects but are short of funds. Small investors can buy new issues or participate in mutual funds that specialize in the supply of venture capital. Also called risk capital.

Venture capital (VC).

Venture capital is financing provided by wealthy independent investors, banks, and partnerships to help new businesses get started, reach the next level of growth, or go public.

In return for the money they put up, also called risk capital, the investors may play a role in the company's management as well as receive some combination of equity, profits, or royalties.

Some venture capital also goes into bankrupt companies to help them turn around, or to companies that the management wants to take private by buying up all the outstanding shares.

venture capital

money subscribed in the form of SHARE CAPITAL and LOAN CAPITAL to finance new firms and activities which are considered to be of an especially risky nature and hence unable to attract finance from more conventional sources. There are a number of specialist institutions covering this sector of the capital market (see STOCK MARKET), including THREE I'S (formerly Investors in Industry) and the venture capital arms of the COMMERCIAL BANKS, INVESTMENT BANKS and MERCHANT BANKS.

Venture capital investors originally concentrated most of their funding on small start-up businesses offering innovative products, but recently a substantial proportion of their funds has been directed towards the less risky business of financing MANAGEMENT BUY-OUTS of established companies.

The British Venture Capital Association represents firms and institutions operating in this area.

venture capital

any SHARE CAPITAL or LOANS subscribed to a firm by financial specialists (for example, the venture-capital arms of the commercial banks), thus enabling the firm to undertake investment in processes and products that, because of their novelty, are rated as especially high-risk projects and, as such, would not normally attract conventional finance. In addition, in recent years venture capitalists have become increasingly involved in financing MANAGEMENT BUY-INS and MANAGEMENT BUYOUTS. See JUNK BOND, THREE I‘S.

venture capital

A common name given to money raised for investment in high-risk enterprises. Venture capital firms may specialize by industry and/or by stage—seed money for start-ups, midstage firms on the brink of success but needing additional capital, or successful firms capable of expansion to a regional or nationwide platform. There is a National Venture Capital Association (www.nvca.org). Sometimes called angel investors.

References in periodicals archive ?
The Venture Michigan Fund I (VMF I) announced today its first round of investment commitments to three venture capital firms focused on growing early stage technology companies in Michigan.
The Venture Capital firms selected through a competitive RFP process to receive investment from Venture Michigan Fund I are:
ATA Ventures ("a team approach") is a venture capital firm focused on seeking out early stage private companies which appear to offer above average prospects for capital growth.
TVM Capital (formerly Techno Venture Management), headquartered in Munich and Boston, was founded in 1983 as one of the first venture capital firms in Germany.
This latest financing from top venture capital firms is a testament to the tremendous global market opportunity in broadband video, and the great momentum and credibility we have established in securing over 20 of the largest media companies," said Hilmi Ozguc, Founder, Chairman and CEO of Maven Networks.
Focus Ventures is the leading expansion stage venture capital firm that invests in emerging market leaders in the software, semiconductor and communications industries.
Draper Fisher Jurvetson Gotham Ventures is an early-stage information technology venture capital firm with approximately $100 million of capital under management, focused on investment opportunities in New York and the surrounding regions.
Sevin Rosen Funds is a top-tier venture capital firm with a track record of funding successful companies since 1981.
BEIJING -- Northern Light Venture Capital, a China focused venture capital firm led by Chinese entrepreneurs who founded major publicly held US technology companies, today announced that it has commenced operations from its office in Zhongguancun, Haidian District, Beijing.
Written by a seasoned practitioner, Venture Capital Fund Management, arguably provides the most comprehensive coverage of the entire professional practice of a venture capital firm.
Montgomery Law Group Expands Its Practice With Addition of Partner Jonathan Noble Specializing in Representation of Emerging Growth Companies and Venture Capital Firms

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