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

5 Reasons a Young Entrepreneur Should Raise Outside Funding
Starting a Business

5 Reasons a Young Entrepreneur Should Raise Outside Funding

Investor Peter S. Cohan gives us the lowdown about scenarios when a young entrepreneur should turn to investors for funds.
Peter S. Cohan
3 Tips for Doing Deals With Big Companies
Growth Strategies

3 Tips for Doing Deals With Big Companies

A role-playing event at a New York City incubator shows what early-stage startups should look out for when trying to land their first big client.
Brian Patrick Eha
A $50 Million Bet on Las Vegas Tech Startups
Technology

A $50 Million Bet on Las Vegas Tech Startups

How the Vegas Tech Fund plans to help transform the tech scene in Sin City, in part two of our series on Tony Hsieh's $350 million Downtown Project.
Teri Evans
Spreading the Love of Silicon Valley (Infographic)
Starting a Business

Spreading the Love of Silicon Valley (Infographic)

Let's face it, Silicon Valley is still the mecca for startups, and every other city is playing catch up.
Andrea Huspeni
Marketing

Google Glass Adds Facebook, Tumblr and 5 Other New Apps

Read about new Google Glass apps, Yahoo's interest in buying Tumblr, Jelly's major investors and more social-media news.
Brian Patrick Eha
Finance

Why Raising Capital Is a 4-Step Process

Seeking funding for your business shouldn't be a one-time endeavor. Here are four stages of business development that can serve as a road map for your funding strategy.
Peter S. Cohan
How Entrepreneur Friendly are the Top 10 Startup Hubs?
Starting a Business

How Entrepreneur Friendly are the Top 10 Startup Hubs?

Before you pack your bags and head off to Silicon Valley, check out how the top startup ecosystems rank when it comes to ease of starting a business.
Andrea Huspeni
The Startup Money Hunt: When Entrepreneurs Bring In Investors (Infographic)
Starting a Business

The Startup Money Hunt: When Entrepreneurs Bring In Investors (Infographic)

Entrepreneurs looking to grow quickly often exchange portions of their company for cash several times in their company's lifecycle. Here is a look at what that path can look like.
Catherine Clifford
From Renting Bedrooms on Airbnb to $1.5 Million in Venture Capital: Lessons in Resourceful Startup Funding
Starting a Business

From Renting Bedrooms on Airbnb to $1.5 Million in Venture Capital: Lessons in Resourceful Startup Funding

Tracy DiNunzio, the founder of online fashion marketplace Tradesy, shares her best advice for accessing startup funding when you are a statistical outlier.
Catherine Clifford
Ken and Ben Lerer Share Their Top 5 Secrets to Success for Young Entrepreneurs
Starting a Business

Ken and Ben Lerer Share Their Top 5 Secrets to Success for Young Entrepreneurs

Big players in New York City's startup ecosystem, the investors behind Lerer Ventures provide insight into what they believe helps entrepreneurs reach their goals.
Andrea Huspeni
At TechCrunch Disrupt, Heavyweight Investors Answer Questions About Outside Financing
Starting a Business

At TechCrunch Disrupt, Heavyweight Investors Answer Questions About Outside Financing

During a panel discussion at TechCrunch Disrupt NY, investors discussed when and how young entrepreneurs should go down the venture capital route.
Andrea Huspeni
Embrace Your Zany Side: Offbeat Ways Startups Win Over Hard-to-Reach VCs
Starting a Business

Embrace Your Zany Side: Offbeat Ways Startups Win Over Hard-to-Reach VCs

Having a killer business idea is key, but it won't necessarily help get your foot in the door when you're looking for funding. Sometimes the best way to grab someone's attention is to get creative.
Matt Villano
Venture Capital Funding Slows in the First Quarter
Finance

Venture Capital Funding Slows in the First Quarter

A new report shows an overall decline in investment dollars and deals but a brighter outlook for the software sector.
Cheryl Winokur Munk
Clif Bar Founders Get Into Venture Capital
Finance

Clif Bar Founders Get Into Venture Capital

The founders of Clif Bar set out to fund more altruistic success stories with their venture capital firm White Road investments.
Matt Villano