What Is A Venture Capital Company
Venture Capital is money or capital provided for new business ventures by investors other than the original proprietor. The term is sometimes also used for capital provided to rescue or turn around a company. Venture Capital is a form of "risk capital". In other words, capital that is invested in a project (in this case - a business) where there is a substantial element of risk relating to the future creation of profits and cash flows. Venture capital is high-risk, high-return investing in support of business creation and growth. In pursuit of high returns, a venture capital ("VC") firm raises a fund of anywhere from $10 million to $350 million in size for their first fund.
Venture capital is a legitimate industry which is now being enhanced through standards and patterns. Venture capital is usually very "patient" money where investors are prepared to leave it in the company for a considerable period of time to give the company a chance to grow and succeed. Venture capital is also on the move, downwards. Im interested to hear from someone as to how the credit crunch will play out with venture capital.
Venture capital is flowing again, to the tune of about $50 billion this year. That's still only a quarter of the seed money available in the peak year of 2000, but it's a big leap from the recent past. Venture capital is considered high risk without any guarantees of financial return and should only be done under the guidance of your own professional advisors. No guarantees are provided for funding services. Venture capital is risk prone capital. An investor who provides venture capital to a business idea therefore aims to get a significantly higher return on his investments than in ordinary investment portfolios.
Venture capital is just one type of product for an Entrepreneur looking for money. There are Angels and simple lending vehicles. Venture capital is a very risky investment and those investing money may lose their entire investment. However, if a product or business becomes successful, the return can be huge. Venture capital is a phenomenon most closely associated with the United States and technologically innovative ventures. Due to structural restrictions imposed on American banks in the 1930s there was no private merchant banking industry in the United States, a situation that was quite unique in developed nations.
Venture capital is somewhat more difficult for a small business to obtain than other sources of financing, such as bank loans and supplier credit. Before providing venture capital to a new or growing business, venture capital organizations require a formal proposal and conduct a thorough evaluation. Venture capital is an important source of equity for start-up companies. Venture capital is really more of an art than a science. There are certain quantitative things you can look at, and you can learn what good indicators are of a successful company, but it's really not easy to pick them.
Venture capital isn't the hoi polloi that the internet makes it out to be. VCs, essentially, invest other people's money. Venture capital is more than money. It?s far too expensive to be treated merely as cash, and if used well, far more critical to the successful venture. Venture capital is not generally suitable for all entrepreneurs . Venture capitalists are typically very selective in deciding what to invest in; as a rule of thumb , a fund may invest in as few as one in four hundred opportunities presented to it.
Venture capital is funding provided to start-up companies in exchange for a percentage of ownership in the firms. Because of the strong local markets in telecommunications, software development, Internet services/security and managed healthcare, 30 venture capital firms including New Enterprise Associates, Blue Water Capital, Grotech Capital Group and Mid-Atlantic Venture Fund, to name a few, have established offices in the county.