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

Mistakes Women Entrepreneurs Make Pitching to Venture Capitalists
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Mistakes Women Entrepreneurs Make Pitching to Venture Capitalists

Female founders seeking funding for their firm should review these four tips. Otherwise they could lose out in the competition for financing.
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Big Money: VC Investing Is Hot in 2014
Venture Capital

Big Money: VC Investing Is Hot in 2014

More than $33 billion was invested in startups by venture capitalists in the first three quarters of this year, surpassing the $30 billion invested by venture capitalists in all of 2013.
Catherine Clifford
Shark Tank Star Lori Greiner's 4 Money Rules for New Entrepreneurs
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Shark Tank Star Lori Greiner's 4 Money Rules for New Entrepreneurs

Drive, passion and determination don't pay the bills; money does. Here are the wise ways the 'Queen of QVC' saved cash as an early entrepreneur and how you can, too.
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The Golden Rule of Startup Capital: Don't Waste Money
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The Golden Rule of Startup Capital: Don't Waste Money

For ambitious entrepreneurs, keep this one rule in mind when preparing your pitch to investors.
Peter Gasca
3 Ways VCs Can Add Value to Your Startup Beyond the Cash
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3 Ways VCs Can Add Value to Your Startup Beyond the Cash

Turns out, there are other perks besides cash.
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What Do Snoop Dogg, Marc Andreessen and Peter Thiel Have in Common? Reddit, Y'all.

With so much drama in the LBC, somehow, someway, Snoop still keeps coming up with funky-ass investments like every single day.
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The 6 Waves to Watch in the World of Crowdfunding
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The 6 Waves to Watch in the World of Crowdfunding

Given the relatively recent arrival of the crowdfunding wave to the market, following its future iterations is sure to provide interesting insights. Here are six trends to keep your eye on.
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Three Years Later, Clinkle Launches Less Than Impressive App
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Three Years Later, Clinkle Launches Less Than Impressive App

The oft-maligned startup rolled out a product that looks very different from its initial $30 million idea.
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Every Business Must Raise Funding and Other Startup Myths
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Every Business Must Raise Funding and Other Startup Myths

Understand what options work best for your business with these expert tips.
Linda Lacina
Starting a Business? Issues You've Likely Overlooked
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Know the nuts and bolts of the options you're considering.
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What to Think About When You Think About Advisors
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What to Think About When You Think About Advisors

Our experts explain the benefits of exploring a range of expertise.
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Entrepreneurship Is a High-Stakes Game. Know Your Odds Going In. (Infographic)
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Entrepreneurship Is a High-Stakes Game. Know Your Odds Going In. (Infographic)

A snapshot of how many businesses start every month and where they get their funding.
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Richard Branson Gets Into Carpooling
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Richard Branson Gets Into Carpooling

Ridesharing service Sidecar announced a $15 million Series B round from the Virgin co-founder and some top VC houses, including Avalon Ventures and Union Square Ventures.
Catherine Clifford