Venture capital

 Venture capital is the financial capital given to high-potential, early-stage, and growth startup firms.  The venture capital is generally called as VC.  The VC fund generates money by owning the equity in the firms it invest in that generally have a business model or novel technology in the high-tech industries such as IT companies, biotechnology, software companies etc. the typical venture capital investments happens after the seed money round as series A round or growth funding round, in the interest of making a return through the eventual realization event like trade sale or IPO of the firm.

In addition to the informal investing and various other angel funding options, the venture capital is attractive for the business organizations with less operating history which are very small to raise funds or capital in the public markets and have not reached the level or point where they are able to complete a debt offering or secure a bank loan. In return of the high risk that the venture capitalist presume by investing in the less mature and small firms, the venture capitalist generally get great control over the firm decisions and a considerable portion of the firm’s ownership  and  consequently value.

Venture capital is also related with the job creation accounting for twenty-one percentage of united states GDP, the knowledge economy and utilized as an alternative measure of innovation within the geography or economic sector.  According to the MoneyTree Report and Thomson Financial, during the Q3 of the year 2006, the venture capitalist in United States invested some 6.6 billion dollars in 797 deals in the United States of America. A survey found by National Venture Capital Association showed that a majority of the venture capitalists forecasted that the venture investments in the United States would have leveled between twenty billion dollars to twenty nine billion dollars in the year 2007.

Questionnaire:

• What is venture capital?
• Give the importance of VC?