Venture Capital Limited Partnership

Venture capital limited partnership

A partnership between a startup company and a brokerage firm or entrepreneurial company that provides capital for the new business in return for stock in the company and a share of the profits.

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Venture Capital Limited Partnership

An agreement between a venture capital firm and a start-up company in which the venture capital firm provides funding and, in exchange, receives a certain percentage of ownership in the company. In other words, the venture capital firm is the limited partner and the start-up is the general partner, which manages the company. This structure gives the venture capital firm limited liability; that is, if the company goes bankrupt, the venture capital company can lose no more than the amount it invested. It also provides the start-up with capital necessary to continue operations and perhaps become profitable.