Venture capital is a type of
private equity capital typically provided by professional, outside investors to new, growth businesses. Generally made as cash in exchange for shares in the investee company, venture capital investments are usually high risk, but offer the potential for above-average returns. A venture capitalist (VC) is a person who makes such investments. A venture capital fund is a
pooled investment vehicle (often a
limited partnership) that primarily invests the
financial capital of third-party investors in enterprises that are too risky for the standard
capital markets or
bank loans. Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies, or ventures, with limited operating history, who cannot raise funds through a debt issue. The downside for entrepreneurs is that venture capitalists usually get a say in company decisions, in addition to a portion of the equity.
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an entrepreneur who helps other entrepreneurs financially, and often plays an active role in the company's operations; they want a large share of the action and quick pay-back-period (see also angel, venture capitalist).
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