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 ?
Foreign venture capital funds both US and non US are playing an active role in venture capital market in India.
In this paper, an attempt is made to study the role of foreign venture capital funds and their contribution for the growth capital market in India.
The first began in the late 1960s and early 1970s, when more than a quarter of the Fortune 500 initiated CPE programs to capitalize on opportunities similar to those identified by some of the early venture capital funds.
Arora said, "I am excited at the opportunity to partner with Sudhir to build the leading venture capital fund in India.
Of the $400 million, $250 million is being committed to a Canadian small and middle market buyout fund of funds and $150 million is being committed to a Canadian venture capital fund of funds, both of which will be invested and managed by TD Capital Private Equity Investors.
The Maryland DBED Venture Capital Fund was established in 1994 and provides direct equity investments in emerging high technology Maryland companies with patented or proprietary products or manufacturing processes and a marketing strategy in place.
We're delighted to welcome Vivek to Texas Pacific Group," said Bill McGlashan, a TPG Partner in the Venture Capital funds.
The new private equity and venture capital funds will be used to acquire minority or majority positions in successful companies across a broad range of emerging growth industries, including technology, healthcare, business and financial services, and consumer and industrial products.
Knightsbridge Advisers Incorporated, a leading early stage venture capital fund of funds firm for more than 22 years, announced today it has raised $500 million from global institutional investors.
Recently, venture capital funds have grown increasingly large and have moved away from their traditional role of providing early-stage capital to businesses, creating a huge gap in the investment continuum and leaving many entrepreneurs looking for the right investment fit.
Wall serves as an advisor for several Southern California based venture capital funds and was the founder of RCG Management, which became Alitum, Inc.
com/reports/c37161) has announced the addition of How a Venture Capital Fund Operates: Leading VCs on Investment Strategies, Fund Management, and Best Practices for Success to their offering.

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