| Venture Capital |
Financing for new businesses. In other words, money provided by investors to startup firms and small businesses with perceived, long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets and typically entails high risk for the investor but has the potential for above-average returns.
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It 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 a limited operating history and who cannot do so 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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IPO Basics Tutorial - What's an IPO, and how did everybody get so rich off them during the dot-com boom? We give you the scoop. |
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