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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

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.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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 ( Sometimes called angel investors.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Lilly Ventures, Indianapolis--The venture-capital arm of Eli Lilly & Co., Lilly Ventures includes three funds totaling $175 million targeting investments in biotechnology companies and other areas of significance to the drug maker.
REI Ventures--This Indiana-based venture-capital organization is a collaboration between Rose-Hulman Ventures and Michigan-based EDF Ventures.
Twilight Venture Partners, Indianapolis--This life-sciences venture-capital fund invests exclusively in early-stage biotech and med-tech companies.
Later, he and a partner started a medical-database company for which they turned down venture-capital offerings before selling the company.
The formal venture-capital market hasn't "dried up." New investments in funds went from $1.4 billion in 1991 to $2.6 billion in 1992.
Changes in taxes and regulations, trends in the greater economy, and the inherent riskiness of the types of firms venture capitalists back lead to dramatic fluctuations in venture-capital funding.
But formal venture-capital funds actually provide a tiny percentage of financing for new firms.
The market research firm Venture Economics reports that between 1969 and 1985 one-third of the investments made by 13 venture-capital firms resulted in partial or total losses.
The National Venture Capital Association's Heesen worries that the existence of federal venture-capital funding might lure private investors into throwing good money after bad.
Majority Leader George Mitchell expressed the exasperation of his party when, two days before the final vote, he complained that "we have [spent] nearly five full days [debating] a bill that is very similar to a bill passed in less than five minutes two years ago." In fact, just before Congress ended its 1992 legislative year, the Senate had easily passed a competitiveness bill; but the 1992 version authorized only $208 million in spending and didn't contain the venture-capital program.
Danforth could propose a separate amendment that removed the venture-capital program from the bill.