What’s Venture Capital?

Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT and software. The typical venture capital investment occurs after the seed funding round as growth funding round (also referred to as Series A round) in the interest of generating a return through an eventual realization event, such as an IPO or trade sale of the company.

To be precise, venture capital not only keeps business booming but also plays a helping hand in the financing of start-up. The venture firms generally anticipate investments for generating returns in five to seven years.