What is Venture Capital Financing?
A Brief Explanation of Venture Capital Financing | Definition
Venture capital (VC) financing is a method of providing capital to target companies. Venture capital is specialized form of private equity. Venture capital refers to investing in early-stage, high-potential, high risk, growth startup companies. Venture capital firms engage in their investments much like private equity firms. A venture capital firm, the general partner, will enter into a limited partnership with investors, the limited partners, to create a venture capital fund. The main difference between private equity and venture capital is the stage at which the investments take place and the strategies used to receive a return on the initial investment.
Venture capital has a long history in the United States, but became widely known during the internet bubble in 1995. Before this time venture capital returns were generally low compared to leveraged buyouts seen in private equity. However, VC investments in early-stage tech companies allowed the venture capital to become widely popularized as huge margins were returned in investors.
Return to Private Equity Glossary
Did you know that through PrivateEquity.com we offer:
- Premium Membership
- Private Equity Training
- A Service Provider Directory
- Data Packages
- An Event Calendar
- Private Equity Jobs
- Financial Analyst & Financial Modeling Certificate Programs
tags: Venture Capital Financing private equity, what is Venture Capital Financing?, Venture Capital Financing definition, Venture Capital Financing explained, Venture Capital Financing explanation, Venture Capital Financing glossary, Venture Capital Financing buyout, Venture Capital Financing finance, Venture Capital Financing definition, videos, Venture Capital Financing private equity terms, private equity glossary, venture capital, private equity definitions, Venture Capital Financing, define Venture Capital Financing