Venture Capital

Venture capital is a type of private equity investing that involves investment in earlier-stage businesses that require capital. In return, the investor will receive an equity stake in the business in the form of shares. 

Companies that raise venture capital do so for a variety of reasons, including to scale the existing business or to support the development of new products and services. Due to the capital-intensive nature of starting a company, many venture-backed companies will operate at a loss for many years before becoming profitable.

• Venture capital firms make private equity investments in disruptive companies with high potential returns over a long-time horizon.
• There are different stages of venture capital financing for companies depending on their phase of growth and objectives.
• Investors in a venture capital firm generate returns when a portfolio company is either acquired by another company or taken public through an initial public offering (IPO).