What is venture capital?
Venture Capital is a term used internationally to denote long-term capital investments in existing companies or companies under establishment by specialized investment companies and by private individuals which entail a certain degree of risk. More specifically, venture capitalists offer capital in return for participation in the company’s share capital. At the same time they may also support portfolio companies on technology, organizational, commercial and financing issues.
Venture capital describes investments in companies that are in the early life-cycle stages. Typically, venture capital finances new, rapidly growing businesses. Venture capital investments are generally high-risk investments but offer the potential for returns well above the S&P 500. Venture capital is an important source of equity for start-up companies.
