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

Steve Case's New $200 Million VC Fund Will Invest 'Off the Beaten Path'
Finance

Steve Case's New $200 Million VC Fund Will Invest 'Off the Beaten Path'

Billionaire Steve Case shares his plans for Revolution Ventures, which will focus on tech companies outside the proving ground of Silicon Valley.
Brian Patrick Eha
Fundraising 101: Words of Advice From One Founder to Another
Finance

Fundraising 101: Words of Advice From One Founder to Another

For our series The Grind, the founder of Travefy offers up advice on securing external capital.
David Donner Chait
Why Equity Crowdfunding Is a Terrible Idea
Starting a Business

Why Equity Crowdfunding Is a Terrible Idea

Equity crowdfunding proposes a fair shot for all entrepreneurs, but as with most things in a capitalist structure, only the strong will survive.
Jeff Wald
Ditch the Business Plan, Get Online and Other Tips for Dealing With Investors
Finance

Ditch the Business Plan, Get Online and Other Tips for Dealing With Investors

Venture capitalist John Frankel offers up advice on how to meet and pitch investors.
John Frankel
AngelList Raises $24 Million as Ban on General Solicitation Lifts
Finance

AngelList Raises $24 Million as Ban on General Solicitation Lifts

The online platform where investors and startups connect has reportedly raised $24 million in an investment round.
Catherine Clifford
How to See Your Startup Through The Eyes of Investors
Finance

How to See Your Startup Through The Eyes of Investors

Understanding exactly what investors want before you go into a VC pitch will help ensure you connect with investors and close the deal.
Peter S. Cohan
Can Entrepreneurs Really Wear What They Want?
Entrepreneurs

Can Entrepreneurs Really Wear What They Want?

You may be your own boss, but that doesn't mean you should pull a Mark Zuckerberg and wear hoodies to investor meetings. Here's some advice.
Coeli Carr
Pouncing on New SEC Rules, Entrepreneurs Develop Tech-Based Solutions for Accrediting Investors
Finance

Pouncing on New SEC Rules, Entrepreneurs Develop Tech-Based Solutions for Accrediting Investors

Some entrepreneurs are looking to streamline the potentially onerous process of accrediting investors in accordance with the SEC's new rules on general solicitation.
Catherine Clifford
Web Startup Scores $28 Million to Simplify A/B Testing
Technology

Web Startup Scores $28 Million to Simplify A/B Testing

Optimizely found a way to make website optimization easier and everyone from Obama to venture captalists took notice.
Matt Villano
New Crowdfunding Platform Gives Hardware Innovators Realistic Production Sources
Finance

New Crowdfunding Platform Gives Hardware Innovators Realistic Production Sources

HWTrek offers hardware innovators the opportunity to prove their business model to experts, consumers and manufacturers.
Ashley Lee
How the Founder of S.W. Basics Got Her Confidence Back
Finance

How the Founder of S.W. Basics Got Her Confidence Back

When you are looking to raise growth funding, you'll often have to answer extremely tough questions about your business and yourself. Here's how one business owner rediscovered just how important it is to be confident.
Adina Grigore
Have a Burning Business Question? Ask the Expert: John Frankel
Finance

Have a Burning Business Question? Ask the Expert: John Frankel

VC John Frankel of ff Venture Capital wants to answer your big startup questions about raising funds, meeting investors and pitching.
Andrea Huspeni
What Every Entrepreneur Should Know About Valuations
Legal Center

What Every Entrepreneur Should Know About Valuations

Read the first part of a series that breaks down what you really need to know about venture capital deals.
Bo Yaghmaie
Presented by
Car-Service Company Uber Reportedly Valued at $3.5 Billion
Finance

Car-Service Company Uber Reportedly Valued at $3.5 Billion

The San Francisco-based limo company has also reportedly received approximately $250 million from Google Ventures, the largest investment that Google's venture capital arm has ever made.
Catherine Clifford