When there is an owner relation between the venture capital providers and receivers, their mutual interest for returns will increase the firms motivation to increase profits.Venture capitalists provide the capital of investment for entrepreneurs and help them facilitate the start of the business.This institution helps in identifying and combining pieces of companies, like finance, technical expertise, know-hows of marketing and business models.It is a way in which public and private actors can construct an institution that systematically creates networks for the new firms and industries, so that they can progress.In exchange for the high risk that venture capitalists assume by investing in smaller and less mature companies, they usually get significant control over company decisions, in addition to a significant portion of the company’s ownership.This form of raising capital is popular among new companies or ventures which cannot raise funds by issuing debt.
Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. It typically entails high risk for the investor, but it has the potential for above-average returns.It is a very important source of funding for start-ups that do not have access to capital markets.Money provided by investors to start-up firms and small businesses with perceived long-term growth potential.Project/Slides/Presentation Transcript Subject: Entrepreneurship Topic: Venture Capital
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