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 ( Sometimes called angel investors.

References in periodicals archive ?
Believe me, raising venture capital is a better way," says Folsom, the CEO of SeminarSource.
Start-ups can get venture capital from a number of sources; large firms with healthy bond ratings can issue debt relatively cheaply and often have better access to the stock market.
The best tool to crack the venture capital community is an airtight business plan.
Founded in 1982, Alta Berkeley is a London-based venture capital firm focusing on the next generation of leading technology companies in communications and computing across Europe and Israel.
These three investments from the Venture Michigan Fund will significantly increase much needed venture capital for Michigan companies," said Thomas Kinnear, chairman of the Venture Michigan Fund Board and director of the University of Michigan's Samuel Zell and Robert H.
is the leading publisher of Venture Capital Directories, providing authoritative coverage of the nation's top regions for Venture financing-- Silicon Valley, Massachusetts, Texas, Mid-Atlantic, Southern California, and the Southeastern U.
Founded in Paris in 1972, Sofinnova Partners is one of Europe's leading independent venture capital firms.
Shoreline Venture Management, LLC is a venture capital firm based in the San Francisco Bay Area.
The Gideon Hixon Fund is the venture capital vehicle for the Hixon family.
In Andrew Metrick's Venture Capital and the Finance of Innovation, future and current Venture Capitalists will find a useful guide to the principles of finance and the financial models that underlie Venture Capital decisions.
TEL AVIV, Israel -- The Israel Venture Association (IVA) is set to host a new venture capital event, the Israel TechNovation Conference, to take place at the Pan Pacific Hotel in Singapore on October 31st, 2006.

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