A venture capitalist is someone who invests in a new business. They provide capital for expansion or a start-up business. Most of them work for venture capital firms and therefore invest not with their own money but with the company’s money. The term can also refer to a company that invests in new business ventures.
Angel investors are venture capitalists using their own money or personal assets. Angel investors often invest in exchange for co-ownership of a startup or convertible debt.
We call the money that venture capitalists invest “venture capital” or “VC”. VC is a type of private equity. Private equity refers to the shares and liabilities of a private company, that is, a company that is not listed on a stock exchange.
BusinessDictionary.com defines venture capitalists as follows:
“Private investors provide venture capital to promising companies. They typically invest where at least 25% annual returns can be achieved within one to five years, and typically require 50% or more ownership in order to exercise control over the investee business. offset their high risk.
“Often they also provide management and industry expertise as well as business relationships with other companies and venture capitalists.”
Google Inc is a venture capitalist
The term refers not only to people but also to companies. For example, Google Inc is a major venture capitalist. Its division, Google Ventures, focuses on venture capital.
Google Ventures also has a large branch in Europe, established with an initial investment of $100 million. Europe, Google said, is full of good ideas, and they’re keen to get out there supporting interesting startups.
Many scientists and people with good ideas would rather approach a venture capitalist than work at a large company. If their idea becomes commercially viable, they will make more money than if they founded a startup.
What is a venture capitalist looking for?
Venture capitalists can see hundreds of business plans and ideas each year. However, they ended up choosing only a few.
They are looking for great people with expertise. They also look for companies that can offer an “unfair advantage.” A company with an unfair advantage is more likely to perform better than others.
A typical venture capitalist wants a higher rate of return than other investments, such as the stock market.
They invest in promising startups or young companies with high growth potential. However, these are also relatively high-risk investments.
Today, common targets for venture capitalists are information technology and biopharmaceutical companies. Cleantech and semiconductors are also popular areas.