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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Three Western locales previously considered vacation destinations are now alternatives to Silicon Valley life at a much more affordable price.
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A stable economy means less competition for scoring investment.
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With slow, steady striving to solve a problem from many different angles, an innovator can arrive at a breakthrough.
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Venture Capital Is In a Recovery, Not a Bubble
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Venture Capital Is In a Recovery, Not a Bubble

Just because venture investment is up doesn't mean we are awash in froth.
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In this question-and-answer interview, Wilson discusses retirement, Tumblr's exit and getting over a difficult year.
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This VC Powerhouse Doesn't Want to Hear Your Elevator Pitch
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This VC Powerhouse Doesn't Want to Hear Your Elevator Pitch

No matter how smart you are or how great you startup idea is, one big investor says the elevator-style pitch doesn't work. Here's why.
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Considering VC for Your Business? Here's What You Need to Know.
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Considering VC for Your Business? Here's What You Need to Know.

Three questions to ask yourself when deciding whether or not you should take an investment from a company.
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Thousands of books offer business, leadership or startup advice, but we've narrowed down the options to some must-reads.
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In-person events for financial prospecting provide benefits that online platforms don't: gathered masses, a pool of dedicated dollars and a chance to receive immediate project feedback.
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When Trading Equity for Cash, Balance Is Everything
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When Trading Equity for Cash, Balance Is Everything

Sell too little, and you lack the resources to grow. Sell too much, and you lose control.
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3 Ways for Women to Close the VC Gender Gap
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3 Ways for Women to Close the VC Gender Gap

Only 7 percent of U.S. venture capital deals go to women founders and CEOs. Let's change that statistic.
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