Venture capitalists are usually professional investors that buy the shares of newly opened or start-up business. These investors buy share that will last for a limited period of time.
This type of funding allows small companies to experience growth in their first years. The participation of venture capitalists allows small companies to be more attractive to financial institutions and improve the possibilities of getting bank loans.
It also allows entrepreneurs to take advantage of advice from these investors, their experience, their address book, etc. It is not uncommon that investors hold a seat on the board of directors with a significant weight in making decisions.
Is Venture capital and capital investment the same thing or are they different?
Venture capital includes all operations that involve buying shares of unlisted companies. These equity investments, usually minority, are performed by specialized professionals whose main aim is to achieve substantial gains in a relatively short time, usually between 4 and 5 years.
The capital investment involved in all stages of business life: creation, development, transfer.
Frequently, the most common recipients of venture capital are companies that work in innovative or creative projects. Companies that work on the field of biotechnology, or IT are popular among venture capitalists.
Venture capital is invested almost exclusively in new promising companies. Their processes, services or product are different from those offered by other companies and would likely be successful.
A venture capitalist can give an investment of more than 300,000 euros. Angel investors may contribute with share of 5,000 to 150,000 euros. In general, there is not a specific amount that dictates the capital investment.
There are different kinds of capital investments. One of them is the Seed Capital where the intervention happens before or just after the actual start-up of the business, or during the stage of developing a new product prototype, pre-series, etc. This investment necessarily requires the establishment of the legal business.
Another example of capital investment is that given to companies that are already past the first stages. This is commonly referred to post-creation capital.
The term "venture capital" concerns only the first two types of intervention.
This type of funding allows small companies to experience growth in their first years. The participation of venture capitalists allows small companies to be more attractive to financial institutions and improve the possibilities of getting bank loans.
It also allows entrepreneurs to take advantage of advice from these investors, their experience, their address book, etc. It is not uncommon that investors hold a seat on the board of directors with a significant weight in making decisions.
Is Venture capital and capital investment the same thing or are they different?
Venture capital includes all operations that involve buying shares of unlisted companies. These equity investments, usually minority, are performed by specialized professionals whose main aim is to achieve substantial gains in a relatively short time, usually between 4 and 5 years.
The capital investment involved in all stages of business life: creation, development, transfer.
Frequently, the most common recipients of venture capital are companies that work in innovative or creative projects. Companies that work on the field of biotechnology, or IT are popular among venture capitalists.
Venture capital is invested almost exclusively in new promising companies. Their processes, services or product are different from those offered by other companies and would likely be successful.
A venture capitalist can give an investment of more than 300,000 euros. Angel investors may contribute with share of 5,000 to 150,000 euros. In general, there is not a specific amount that dictates the capital investment.
There are different kinds of capital investments. One of them is the Seed Capital where the intervention happens before or just after the actual start-up of the business, or during the stage of developing a new product prototype, pre-series, etc. This investment necessarily requires the establishment of the legal business.
Another example of capital investment is that given to companies that are already past the first stages. This is commonly referred to post-creation capital.
The term "venture capital" concerns only the first two types of intervention.
About the Author:
Wade Henderson - recognized Professional - 15 yrs in the Business Finance Field - strong reputation for getting the deal done. IMMFinancial.com private venture capital venture capitalist Get a totally unique version of this article from our article submission service
