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

Finance

VC Funding of U.S. Companies Falls to Lowest Level in 3 Years

Venture-capital funding has declined sharply year-over-year in the second quarter, according to the latest data from Dow Jones VentureSource.
Ray Hennessey
A Startup Brings High-Tech Sports Analytics to School Teams
Technology

A Startup Brings High-Tech Sports Analytics to School Teams

The online video and analytics platform Krossover analyzes plays for high school and college teams.
Steve Case on Startups That Attract His Attention and What Kills a Deal
Finance

Steve Case on Startups That Attract His Attention and What Kills a Deal

Need VC? The investor and AOL co-founder on how he decides on who gets funding.
Teri Evans
Where to Look for Investors to Fund Your Startup
Starting a Business

Where to Look for Investors to Fund Your Startup

Co-founder of SkyMall Inc. and Worthworm Alan Lobock provides young entrepreneurs tips on approaching investors.
Alan Lobock
Students Funding Students: A Look at Campus-Based Investment Funds
Starting a Business

Students Funding Students: A Look at Campus-Based Investment Funds

In the race to find the next young entrepreneurial dynamo, VC firms are increasingly putting students in control of the selection process.
Susan Johnston
The Art and Science of Company Valuations (Infographic)
Finance

The Art and Science of Company Valuations (Infographic)

See a visual explanation of how young companies are valued, in some cases before they're even making money.
Catherine Clifford
Entrepreneur Puts a Revolutionary Spin on Electric Motorcycles
Finance

Entrepreneur Puts a Revolutionary Spin on Electric Motorcycles

Daniel Kim's startup Lit Motors and its groundbreaking take on the motorcycle has pulled in more than $1 million in angel funding.
Grant Davis
Technology

VC Fund to Offer $25 Million to Leap Motion App Developers

Highland Capital Partners plans to finance and mentor developers creating apps for the cutting edge technology.
Jason Fell
Lessons From a Startup That Scored $836 Million in VC -- and Failed
Growth Strategies

Lessons From a Startup That Scored $836 Million in VC -- and Failed

Better Place, based in Palo Alto, Calif. won funding from investors like General Electric and Morgan Stanley, yet had to shut its doors in May. Here are lessons to learn from the startup's missteps.
Peter S. Cohan
Online VC Service Lets More Investors Into the Game
Finance

Online VC Service Lets More Investors Into the Game

FundersClub helps facilitate financing in early-stage companies for small investors who want to make small investments.
8 Startup Events and News to Know About This Week
Starting a Business

8 Startup Events and News to Know About This Week

Master the art of cross-channel marketing at Integrated Marketing Week, take advantage of the guerrilla pitch opportunity of the year, enter the NY startup scene with drinks and demos at 3rd Ward in Brooklyn, become a social media superstar, create a happy and positive business environment, rumors predict new Apple iPad5 and MacBook Air release, PandoDaily hosts Fred ‘The Don' Wilson for a 90-minute, on stage shakedown, refine new ideas and find your MVP at Lean Startup Machine… This week's notable news and startup events for young treps.
Finance

A Quick Guide to Finding a Venture Capital Match

Looking for money to grow a company or get it off the ground? There are venture capital firms across the country eagerly seeking to fund good business ideas, but fit and size matter.
Bloomberg Opens $75 Million Venture Capital Fund
Technology

Bloomberg Opens $75 Million Venture Capital Fund

The New York City-based media company becomes the latest high-profile corporation to commit to nurturing startups.
Brian Patrick Eha
Kickstarter's Rising Competition: Crowdfunding Alternatives to Donation-Based Sites
Finance

Kickstarter's Rising Competition: Crowdfunding Alternatives to Donation-Based Sites

The JOBS Act may soon go into effect, but young entrepreneurs don't need to wait to look for investors in the crowd.
Larry Baker and Charlie Tribbett