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

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
Crowdfunding's Next Hot Frontier: Real Estate
Crowdfunding

Crowdfunding's Next Hot Frontier: Real Estate

Venture capital and angel investors are sinking money into startups that are innovating the way that buildings are bought.
Catherine Clifford
How to Make Time Work for You When Pitching for Funds
Pitching investors

How to Make Time Work for You When Pitching for Funds

The hour of the day, minutes in a slide and when your idea will pay off will determine whether you'll see any money.
Harrison Monarth
Aaron Levie, the Quintessential Silicon Valley CEO, Will Only Own 4.1 Percent of Box When It IPOs
Innovator Profiles

Aaron Levie, the Quintessential Silicon Valley CEO, Will Only Own 4.1 Percent of Box When It IPOs

Online file-storage service Box has finally filed to go public. Here's what we know.
Laura Entis
Seeking Funding? Be Aware of These 5 Details.
Funding

Seeking Funding? Be Aware of These 5 Details.

Venture capital has big rewards, but also added stress.
Nathan Resnick
Disposable Phone Numbers Are So Hot Right Now
Finance

Disposable Phone Numbers Are So Hot Right Now

The venture capital money came pouring in for Burner, a mobile app that doles out disposable phone numbers for calling and texting.
Michelle Goodman
3 Surprisingly Hot Global VC Markets That Are Getting Even Hotter
Venture Capital

3 Surprisingly Hot Global VC Markets That Are Getting Even Hotter

The U.S., Europe, China, India and Israel continue to dominate the venture capital game, but a few emerging markets are worth keeping an eye on.
Catherine Clifford
Uber Competitor Lyft Eyes $150 Million in New Funding
Venture Capital

Uber Competitor Lyft Eyes $150 Million in New Funding

The San Francisco-based company known for the pink mustaches adhered to the front of the cars in its network is looking to close in on its fourth round of fundraising.
Catherine Clifford
More Money, More Problems: The Down Side of a Mega Valuation
Finance

More Money, More Problems: The Down Side of a Mega Valuation

The bragging rights may be tempting, but achieving a jaw-dropping valuation for your company can cause problems down the line.
Does Your Team Have the Right Stuff to Attract Venture Capital?
Venture Capital

Does Your Team Have the Right Stuff to Attract Venture Capital?

These four things may be even more important to investors than a solid business idea.
George Deeb