Venture Capital Industry

Venture capital is a form of private equity financing provided by firms or funds to startup, early-stage and emerging companies judged to have significant growth potential, in exchange for equity rather than debt repayment. Venture capitalists are highly selective, funding roughly one company for every hundred considered, and typically realize returns when a portfolio company is acquired, merges or goes public rather than through guaranteed interest payments. The industry concentrates on technology and life sciences ventures because these companies often need substantial upfront capital for intangible assets such as software and unproven intellectual property, and because they are usually too small to raise money in public markets or secure conventional bank loans.