Venture Capital

Venture Capital Basics

What It Is: Institutional venture capital comes from professionally managed funds that have $25 million to more than $1 billion to invest in emerging growth companies. Venture capital focuses on capital investments in private, young, fast-growing companies.

Appropriate for: High-growth, high-potential companies that are capable of becoming market leaders, and being profitable in five to eight years.

Best Use: Varied. From financing product development and commercializing promising technologies to building durable well-run businesses.

Cost: Expensive. Institutional venture capitalists purchase significant equity in a business. The earlier the investment stage, the more equity is required to persuade an institutional venture capitalist to invest. The range of funds typically available is $500,000 to more than $30 million.

Ease of Acquisition: Difficult. Institutional venture capitalists are choosy. Institutional venture capital is an appropriate source of funding for only a limited number of companies.

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Today's Most Read

News and Articles About Venture Capital

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Report: Dropbox Eyeing $8 Billion Valuation

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Why So Many VC Firms Invest in the Same Companies

How to understand venture capital's herd mentality.
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No Revenue, No Problem: Pinterest Raises Another $225 Million

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Confidence Among Silicon Valley VCs at Highest Since 2007, Report Shows

Despite five consecutive quarterly increases, Silicon Valley confidence still lags behind that seen in 2004, 2005 and 2006.
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Launching Today: Silicon Valley Venture Fund for Big Data Startups

Data Elite wants to fill a need for big data startups that aren't satisfied by generic startup incubators and investment funds. And it has major backers ready to make sure it succeeds.
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