What is Venture Capital?
Private equity financing from speacialist organisations or wealthy indiviuals who are prepared to lend risk captal to, or purchase shares in, business start ups or small/medium sized businesses that find it difficult to raise captial from other sorces. They are often deemed to have high growht potential or have demonstrated high growth.
The lendors expect a share of the future profits, or a zieable stake in the businesess in return.
Why is it needed?
It is often cuased by the nature of the business being risky. For exmaple, a risk could be new technology that the company is dealing with or the risk from complect research it is panning. (Not all providers are prepare to take the risk and get involved).
Is it worth it?
Although it is risky and expansive, the rewards can be great. In fact, the value of Apple and other high-tech businesses has grown rapidly, many of which were financed by enture capital.
Comments
No comments have yet been made