Venture capital

Venture capital
See also
Private equity investments Personal assets Classification of financial markets Caisse populaire External sources of finance Primary market Continental model of corporate governance Global bank Bonds

Venture capital (VC) is a modern type of raising funds for the inwestments and projects. Venture capital was once known also as risk capital, but that term has fallen out of usage, probably because investors don't like to see the words "risk" and "capital" in close conjunction.

Venture capital was instrumental in the success of companies like: Cypress Semiconductor, Apple Computer, Intel, Amgen, GenenTech, Solectron, Cirrus Logic, Federal Express, Au Bon Pain, Gymboree, Brookstone, The Sports Authority and more.

History

U.S.A.

Best developed Venture capital market was located in the USA. It is hard to say when it all started but the year 1978 is the time when Venture capital boom was perceived.

Europe

The earliest VC market was noticed in Great Britain in late 40's. This time delay in comparison to the US, was caused by the War in Europe.

Investment details

Period of time: 5 – 10 years (This is a long term investment. It is required due to the length of enterprise development)

Type of investment: developer invest by share purchase.

Legal forms of Venture capital funds

• Private Limited Partnerships
• Publicly Traded Funds
• Corporate Venture Capital
• Angel Investors

Types of Venture capital funds

• Universal Venture Capital Funds
• Venture Capital Funds Assisted by the Government
• Venture Capital Funds Focused on Early Stages of Enterprise Development
• Company Share Funds
• Private equity investments

See also:

• Primary market

References

• Sahlman, W. A. (1990). The structure and governance of venture-capital organizations. Journal of financial economics, 27(2), 473-521.

Author: Rafał Szkaradek