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 ?
Sophanita continued that venture capital firms and CSX are not competitors, but provide distinct financial products to businesses.
At a certain level, many venture capital firms share a common DNA with the technology companies they fund.
Korea Development Bank (KDB) has created a global partnership fund worth 80 billion won in cooperation with the Industrial Bank of Korea (IBK) to attract overseas venture capital firms and help create venture funds here.
Since the venture capital firm launched in 2000, they have invested in a number of Scottish success stories, including Wolfson Microelectronics and Skyscanner.
Meanwhile, "The Business Publisher" could not confirm the reported sale of Entrepreneuer Media (Irvine, CA), the publisher of "Entrepreneur" magazine and related information products, to Austin Ventures and another, unnamed venture capital firm. Both "Folio:" magazine and paidContent.org have reported that the sale price is under $200 million and is to be completed by early July.
Summit Partners is a private equity and venture capital firm that has raised nearly $9 billion in capital since its inception in 1984.
David Cremin, general partner at DFJ Frontier, a Santa Barbara, Calif.-based venture capital firm that specializes in post-seed investments, says: "If you are pre-revenue and pre-product, you aren't getting funding unless you go to the small handful of seed-stage venture capitalists and angels who will do that sort of deal.
Based in New York City, Belfonti Capital Partners is a venture capital firm focused on acquiring real estate development and investment opportunities throughout the United States and internationally.
Syngenta, Basel, Switzerland, has announced the launch of a $100m venture fund, LSP BioVentures, based in Boston to be managed by Life Sciences Partners (LSP), a biotech venture capital firm. Funds will be invested over a three to five year period as appropriate opportunities arise.
An airless tire that runs cool and stable at highway load and highway speed, with lower rolling resistance than a conventional pneumatic tire, while mounted on a standard wheel, has been developed by NewTech Tire, a venture capital firm located in Boca Raton, FL.
Hotmail's Bhatia benefited from TiE's Rolodex in 1995, when he was introduced to Farouk Arjani, a limited partner at venture capital firm Sequoia.
With the help of venture capital firm partners, which will identify promising business start-ups, primarily in Oregon and Washington, the Oregon Investment Fund plans to invest its $105 million over the next three years, said David Almodovar, a Portland-based executive with Credit Suisse First Boston.

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