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.

Source: National Venture Capital Association

Today's Most Read

News and Articles About Venture Capital

Inside the Mind of Big-Time Investor Fred Wilson
Fred Wilson

Inside the Mind of Big-Time Investor Fred Wilson

In this question-and-answer interview, Wilson discusses retirement, Tumblr's exit and getting over a difficult year.
Alyson Shontell
This VC Powerhouse Doesn't Want to Hear Your Elevator Pitch
Pitching investors

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.
Kate Rogers
Considering VC for Your Business? Here's What You Need to Know.
Venture Capital

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.
14 Books Every Entrepreneur Should Read in '14
Business Books

14 Books Every Entrepreneur Should Read in '14

Thousands of books offer business, leadership or startup advice, but we've narrowed down the options to some must-reads.
John Rampton
Crowdfunding Live: How One Spark Ignites Ideas
Crowdfunding

Crowdfunding Live: How One Spark Ignites Ideas

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.
Sally Outlaw

Want to Start an Investment Company? Go it Alone First.

Our expert explains that experience is paramount to building a solid investing track record
Jay Turo
When Trading Equity for Cash, Balance Is Everything
Equity

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.
Amanda Steinberg
3 Ways for Women to Close the VC Gender Gap
Venture Capital

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.
Michelle Goodman
5 Things to Look for in a Venture Capitalist
Venture Capital

5 Things to Look for in a Venture Capitalist

Former VC says you should approach these funders carefully, and be thorough in your research.
Steve Andriole
8 Ways to Hit a Home Run When Pitching a New Product to a Major Corporation
Sales

8 Ways to Hit a Home Run When Pitching a New Product to a Major Corporation

A startup approaching a large company to market its wares needs to be prepared in multiple ways. Follow this guidance from a venture capital firm.
Scott Goering
This Billionaire Just Gave 10 Startups $100,000 Each on a Whim
Finance

This Billionaire Just Gave 10 Startups $100,000 Each on a Whim

At the first-ever Google for Entrepreneurs Demo Day, AOL co-founder Steve Case surprised each of the presenting entrepreneurs with a spur-of-the-moment $100,000 commitment.
Catherine Clifford
Alibaba Goes In On Uber Competitor Lyft's $250 Million Round
Ecommerce

Alibaba Goes In On Uber Competitor Lyft's $250 Million Round

Chinese ecommerce giant Alibaba invested in the San Francisco-based ride-sharing company, which plans to expand internationally.
Catherine Clifford
Imgur Finally Says Yes to VC Funding, Accepts $40 Million From Andreessen Horowitz
Venture Capital

Imgur Finally Says Yes to VC Funding, Accepts $40 Million From Andreessen Horowitz

Imgur has never accepted outside money before, calling former petitions by other venture capitalists a poor fit.
Geoff Weiss
Fundraising 101: The First Timer's Guide to Pitching Investors
The Grind

Fundraising 101: The First Timer's Guide to Pitching Investors

Pitching to investors can be a daunting and at times, tough on an entrepreneur's confidence level. Here are a few tidbits of advice on pitching from an entrepreneur who has been there, done that.
Jamie Wong