Startups typically seek A round financing when they pursue the next level of funding after seed capital.

The A round is normally the second stage of financing that a company receives, and is also the first major funding round in the venture capital stage. The term A round financing refers to funding that a startup or other young private company receives from private equity investors or venture capitalists. A round financing is funding that a startup receives from private equity investors or venture capitalists. It is normally the second stage of financing after seed capital and the first major funding round in the venture capital stage.

A Round Financing

The term "adventure capitalist" is colloquially used to describe venture capital (VC) investors who have particularly high risk tolerances.

The term "adventure capitalist" is colloquially used to describe venture capital (VC) investors who have particularly high risk tolerances. Where others would have seen the lack of an existing industry in which to grow, an adventure capitalist might have seen the potential for individual companies, such as Facebook, to be the pioneers of that industry, cementing their position as the market leader. While the field of VC investing is known for its high risk tolerance, adventure capitalists are arguably even more comfortable with risk. In those early years, adventure capitalists who had decided to back companies such as Facebook (FB) would have seemed to be taking an almost reckless level of risk. Importantly, adventure capitalists will seek to maximize their chances of success by personally contributing to the management of the companies they invest in.

Adventure Capitalist Defined

An angel investor is usually a high-net-worth individual who provides financial backing for small startups or entrepreneurs, usually in exchange for ownership equity.

Updated Investor Bulletin: Accredited Investors

An angel investor (also known as a private investor, seed investor or angel funder) is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company. This is why professional angel investors look for opportunities for a defined exit strategy, acquisitions or initial public offerings (IPOs).
The effective internal rate of return for a successful portfolio for angel investors is approximately 22%.﻿﻿ Though this may look good for investors and seem too expensive for entrepreneurs with early-stage businesses, cheaper sources of financing such as banks are not usually available for such business ventures. Angel investors typically use their own money, unlike venture capitalists who take care of pooled money from many other investors and place them in a strategically managed fund.
Though angel investors usually represent individuals, the entity that actually provides the funds may be a limited liability company (LLC), a business, a trust or an investment fund, among many other kinds of vehicles. Angel investors are also called informal investors, angel funders, private investors, seed investors or business angels. An angel investor (also known as a private investor, seed investor or angel funder) is a high-net-worth individual who provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company.

Angel Investor

An archangel is an angel investor who's gone through numerous high-profile, successful exits.

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What Is an Archangel? Angel investors, also known as seed investors or angel funders, are high-net-worth individuals (HNWIs) who deploy their own funds to provide startup capital to promising early-stage ventures. The term archangel can also be used to describe an external advisor hired by a group of angel investors to perform due diligence and provide advice on business opportunities that are being considered by the group. While most angels are active and hands-on investors, they may sometimes need the services of an archangel (external advisor) in areas like legal and business development. An archangel may serve as a relationship builder among angel investors, leveraging their clout and notoriety to bring them together for deals.

Archangel

Committed capital is the money that an investor has agreed to contribute to an investment fund.

Committed capital is the money that an investor has agreed to contribute to an investment fund. Depending on the structure of the fund, committed capital may be allocated toward specific investments or it might be drawn into a general-purpose fund called a blind pool. In attracting investor capital, your fund provides detailed information regarding its investment strategy, including examples of past acquisitions and a timeline of expected future acquisitions. As such, their managers rely on investors' committed capital to ensure they have adequate resources to fund their acquisition pipeline and administrative expenses. Committed capital should not be confused with capital commitment, which is when a broker-dealer or investment bank agrees to participate in a client trade using the firm's own money.

Committed Capital

Crammed down mainly refers to a dilutive venture capital (VC) financing round or the imposition of a bankruptcy reorganization plan by the court.

Crammed down is mainly used to describe either a dilutive venture capital (VC) financing round or the imposition of a bankruptcy reorganization plan by the court.
Crammed down mainly refers to a dilutive venture capital (VC) financing round or the imposition of a bankruptcy reorganization plan by the court. When a VC financing round is crammed down, it means that the price of each share of a business is below earlier prices, causing the percentage of the company owned by the earlier investors to be lowered. When a VC financing round is crammed down, it means that the price of each share of a business is below earlier prices, causing the percentage of the company owned by the earlier investors to be lowered. Historically, the term crammed down mainly came up in Chapter 13 bankruptcy filings, reflecting the debtor being given permission by the court to change the terms of a contract and initiate a reorganization plan for an individual or company.

Crammed Down

Deal flow describes the rate business proposals and investment pitches are received by financiers such as investment bankers and venture capitalists.

Deal flow is a term used by investment bankers and venture capitalists to describe the rate at which business proposals and investment pitches are being received. Economic expansion and robust equity markets will usually generate healthy deal flow for most financiers, while a recession and sluggish equity markets may generate some deal flow for only the most established players. Deal flow is a term used by investment bankers and venture capitalists to describe the rate at which business proposals and investment pitches are being received. While large investment banks can handle most of these activities, specialist financiers such as venture capitalists and angel investors will generally focus on deal flow only in their area of expertise. While deal flow can be generated from several sources, the proposals that are likely to garner the most attention are the ones from companies or entrepreneurs where a previous investment has been successful, or where there is a solid existing relationship.

Deal Flow

The death valley curve describes the period in the life of a startup in which it has begun operations but has not yet generated revenue.

Surviving the death valley curve marks a significant milestone in the life of a startup company, signaling to investors that it has survived its startup phase and stands a better chance of reaching maturity. A startup company's death valley curve is the span of time from the moment it receives its initial capital contribution until it finally begins generating revenue. The reason the death valley curve is so challenging for startup companies is that numerous expenses must be borne before a new product or service can begin generating revenue. The shape of the death valley curve will vary on a case-by-case basis, depending on factors such as the business plan, the industry niche, and the amount of seed capital invested in the startup.

Death Valley Curve

Diluted founders is a term often used by venture capitalists (VCs) to describe the founders of a startup gradually losing ownership of their company.

"Diluted founders" is a term used by venture capitalists (VCs) to describe the process of a startup's founders gradually losing ownership of the company they created. When an entrepreneur or team of founders launches a startup, the ownership of the company (or its equity) is divvied up among the founders, adding up to 100%. This allocation may be an equal split or handed out according to perceived contributions to the new venture, duties and roles, or any other criteria. Diluted founders is a term used by venture capitalists to describe the founders of a startup gradually losing ownership of the company they created. Startup founders who rely on venture capital to grow their business must surrender more and more ownership of the company in return for the capital received. As a result, the founders dilute their ownership in the company in exchange for capital to grow their business.

Diluted Founders

Dilution protection is a provision that seeks to protect shareholders and early investors in a company from a decrease in their ownership position.

Dilution protection refers to contractual provisions that seek to restrict a corporation's power to reduce an investor's stake in the company after later funding rounds or new equity issuance occur. Although dilution protection is an attractive measure to early investors, companies that offer this provision may struggle to attract later investors, who will not enjoy the same risk protection on the shares they purchase in later funding rounds. Outlined in a company's funding and investment agreements, the most common form of anti-dilution provision protects convertible stock or other convertible securities in the company, by mandating adjustments to the conversion if more shares are offered. The two types of anti-dilution provisions are full ratchet anti-dilution, and weighted average anti-dilution, which differ based on the level of protection each plan offers investors. Consequently, upon conversion, existing investors with dilution protection would receive more shares of the company, thereby letting them maintain their original ownership stake percentage.

Dilution Protection

A distribution waterfall is a method by which capital gains are allocated between the participants in an investment.

A distribution waterfall a way to allocate investment returns or capital gains among participants of a group or pooled investment. Though waterfall schedules may be customized, generally the four tiers in a distribution waterfall are:
1.  **Return of capital (ROC)*\- 100 percent of distributions go to the investors until they recover all of their initial capital contributions.
2.  **Preferred return*- 100 percent of further distributions go to investors until they receive the preferred return on their investment. Generally, there are four tiers in a distribution waterfall schedule: return of capital; preferred return; the catch-up tranche; and carried interest. A distribution waterfall describes the method by which capital is distributed to a fund's various investors as underlying investments are sold for gains. A distribution waterfall a way to allocate investment returns or capital gains among participants of a group or pooled investment.

Distribution Waterfall

A drive-by deal is a slang term referring to a venture capitalist (VC) who invests in a startup with a quick exit strategy in mind.

A drive-by deal is a slang term referring to a venture capitalist (VC) who invests in a startup with the goal of executing a very quick exit strategy, ideally by way of an initial public offering (IPO) on a stock exchange. The term refers to the common practice at the time of angel investors and VCs agreeing to fund early-stage startup companies without doing any real due diligence to verify if the firm's business plan and management team was a worthwhile and promising investment.
During the technology boom, VCs were anxious to fund the next big company before their competitors. A drive-by deal is a slang term referring to a venture capitalist (VC) who invests in a startup with the goal of executing a very quick exit strategy, ideally by way of an initial public offering (IPO) on a stock exchange. Drive-by VC deals may be seen as advantageous for both the startup company and the VC: they allow a company to boost its growth at a very high rate early on in its life cycle while enabling the investors to quickly get their capital back in order to reinvest in new projects without being tied up for years at a time. A drive-by deal is a slang term referring to a venture capitalist (VC) who invests in a startup with a quick exit strategy in mind.

Drive-By Deal

Equity co-investment is made by minority investors alongside a majority institutional investor.

An equity co-investment is a minority investment in a company made by investors alongside a private equity fund manager or venture capital (VC) firm. An equity co-investment is a minority investment in a company made by investors alongside a private equity fund manager or venture capital (VC) firm. In certain situations, the LP's funds may already be fully committed to a number of companies, which means that if another prime opportunity emerges, the private equity fund manager may either have to pass up the opportunity or offer it to some investors as an equity co-investment. Equity co-investment opportunities are typically restricted to large institutional investors who already have an existing relationship with the private equity fund manager and are often not available to smaller or retail investors. Equity co-investment enables other investors to participate in potentially highly profitable investments without paying the usual high fees charged by a private equity fund.

Equity Co-Investment

A labor-sponsored venture capital corporation (LSVCC) is a Canadian firm originated by a labor union that offers venture capital.

Archived - Labour Sponsored Investment Fund Tax Credit

A labor-sponsored venture capital corporation (LSVCC) refers to a corporation created by a Canadian labor union that exclusively provides venture capital to Canadian companies. A labor-sponsored venture capital corporation (LSVCC) refers to a corporation created by a Canadian labor union that exclusively provides venture capital to Canadian companies. A labor-sponsored venture capital corporation (LSVCC) is a labor union-organized venture funding corporation aimed at Canadian companies. Canadian investors can no longer receive tax credits for federally-registered LSVCCs for the 2017 or future tax years. For tax years before this period, investors received a 5% tax credit for shares purchased in federal LSVCCs.

Labor-Sponsored Venture Capital Corporation (LSVCC)

A pledge fund is a type of investment vehicle in which the participants agree, or "pledge," to contribute capital to a series of investments.

A pledge fund is a type of investment vehicle in which the participants agree, or "pledge," to contribute capital to a series of investments. Similarly, pledge-fund managers may have difficulty recruiting third-party investors to assist in large deals, since the individuals involved in the pledge fund might differ from one deal to the next. For these investors, the main virtue of the pledge fund format is that it does not force individual investors to back ventures they do not wish to invest in, but which the majority of investors support. Indeed, because of the added flexibility which it offers to investors, pledge fund managers may find it easier to raise capital using this model as compared to blind pool funds. Lastly, sellers with multiple suitors may prefer dealing with a more traditional fund structure in which permanent capital is already in place—especially if they wish to close as quickly as possible.
Suppose you are the manager of a pledge fund specializing in commercial real estate acquisitions.

Pledge Fund Defined

A pre-money valuation expresses the value of a company before it receives outside investments.

A pre-money valuation refers to the value of a company before it goes public or receives other investments such as external funding or financing. So, if a company's pre-money valuation is $25 million and it receives $5 million from an investor, the post-money valuation is $30 million. So a company whose post-money valuation is $20 million after receiving a $3 million investment has a pre-money valuation of $17 million. As its name implies, post-money valuation is different from pre-money because it indicates how much a company is worth after it receives an investment. The post-money valuation is the total of the pre-money, plus the additional equity injected into the company.

Pre-Money Valuation

A private investment fund is a fund that is not open to regular investors or the general public in most cases. 

A private investment fund is an investment company that does not solicit capital from retail investors or the general public. Many hedge funds are private investment funds so they can continue to use aggressive trading strategies that the manager of a public fund would avoid due to the potential for investor lawsuits resulting from unreasonable risk-taking. Hedge funds and private equity funds are two of the most common types of private investment funds. A private investment fund is an investment company that does not solicit capital from retail investors or the general public. This allows private investment funds to look at illiquid investments that a public fund would shun due to the difficulties of regular valuation and liquidation in the case of rising redemptions.

Private Investment Fund

A private placement is a sale of stock shares to pre-selected investors and institutions rather than on the open market.

The Laws That Govern the Securities Industry

Investor Bulletin: Private Placements Under Regulation D

LIGHTSPEED SYSTEMS HAS AGREED TO RECEIVE A STRATEGIC GROWTH INVESTMENT FROM MADISON DEARBORN PARTNERS

Private Equity Round - Lightspeed Systems

Lightspeed Systems Announces Strategic Growth Investment from Madison Dearborn Partners

A private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than on the open market. The company is not required to provide a prospectus to potential investors and detailed financial information may not be disclosed.
The sale of stock on the public exchanges is regulated by the Securities Act of 1933, which was enacted after the market crash of 1929 to ensure that investors receive sufficient disclosure when they purchase securities.﻿﻿ Regulation D of that act provides a registration exemption for private placement offerings. The light regulation of private placements allows the company to avoid the time and expense of registering with the SEC**.**
That means the process of underwriting is faster, and the company gets its funding sooner.
If the issuer is selling a bond, it also avoids the time and expense of obtaining a credit rating from a bond agency. As an example, Lightspeed Systems, an Austin-based company that creates content-control and monitoring software for K-12 educational institutions, raised an undisclosed amount of money in a private placement Series D financing round in March 2019.﻿﻿ ﻿﻿ The funds were to be used for business development.
Above all A private placement is a sale of stock shares or bonds to pre-selected investors and institutions rather than on the open market.

Private Placement

A promoter is an individual or company that for a fee raises money for investments. Learn how stock promoters work and what you need to look out for. 

Table of Contents
What Is a Promoter?
How a Promoter Works
Types of Promoters Stock promoters may raise money for a company by offering investment vehicles other than traditional stocks and bonds, such as limited partnerships and direct investment activities. Because the investments promoted by individual promoters or promotion firms are not formally registered with the Securities and Exchange Commission (SEC), some promoters have been linked to an inordinately high number of investment scams and litigation. A stock promoter is an individual or organization that helps raise money for some investment activity. The use of stock promoters is fairly common in the penny stock market.

Promoter

The realization multiple measures the actual money paid back to investors in a private equity fund. The realization multiple measures the return that is realized from the investment.

The realization multiple is a private equity measurement that shows how much has been paid out to investors. The realization multiple is also referred to as distributed to paid-in capital (DPI).
The realization multiple is used in private equity to measure the actual money paid back to investors.
The realization multiple is effectively the realized return to a private equity fund and may also be known as distributed paid-in capital. It is combined with other measures like the investment multiple, the paid-in capital (PIC), the total value to paid in multiple (TVPI), and the residual value to paid in multiple (RVPI). If a private equity fund is paying out money to investors year after year, its realization multiple will climb as there are more distributions in the books. ![Image](data:image/gif;charset=utf-8;base64,R0lGODlhEAAEAPMAAB8dHl5bVlNabOTd0+bf1+fg2Obi2efj2uni2urj2erj2+nl3Ovk3Orm3R8dHh8dHiwAAAAAEAAEAEMILwATNGiwgMHABQMbHEDYgICChAwXMDTA0OHBiBMrCggAAEACBQoQfFRQAAHIAQEBADs=)
Image by Sabrina Jiang © Investopedia 2021
The realization multiple is popular among venture capitalists and private equity fund investors.

Realization Multiple

Seasons is a term used predominately among venture capitalists (VCs) to describe the current stage of a proposed business idea or concept.

Seasons is a term used predominately among venture capitalists (VCs) to describe the current stage of a proposed business idea or concept. The job of the VC is to pool investment funds from wealthy, high-net-worth individuals (HNWI), insurance companies, pension funds, and the like, then identify and invest in businesses capable of providing their investors with a high rate of return. Chasing high returns inevitably involves investing early and taking on plenty of risks, though these private equity investors will still want to do a lot of homework and receive some assurances before settling on an investment, mindful that too many blunders will put them out of business. Certain series A investors might buy in during the adolescent phase when a product has achieved some traction and attracted demand in a fairly big market, but management still lacks a solid business model and plan on how to consistently generate money from its operations. A concept or idea would be considered to be in the spring phase if it's so new and fresh that no one, including other VCs, really knows about or understands it.

Seasons

In a secondary buyout (SBO), a financial sponsor or private equity firm sells its investment in a company to another financial sponsor or private equity firm.

Slow growth businesses with high cash flows may be more appealing to private equity firms than they are to public stock investors or other corporations
There are a few things the buying company can do to make sure the buyout makes sense including determining the potential for future success for the entity by reviewing its previous successes and conducting stress tests and other research.
Secondary buyouts are successful if the investment matures to the point where it is necessary or desirable to sell rather than continue holding the investment. Secondary buyouts often make sense when the selling firm already realizes significant gains from the investment, or when the buying private equity firm can offer greater benefits to the firm being bought and sold. Private equity firms continue to pursue secondary buyouts for a variety of reasons including:
A sale to strategic buyers or an IPO may not be an option for a niche or small business
Secondary buyouts might be able to generate quicker liquidity The term secondary buyout (SBO) refers to a transaction involving the sale of a portfolio company by one financial sponsor or private equity firm to another.

Secondary Buyout (SBO)

Tag-along rights are contractual obligations used to protect a minority shareholder (usually in a venture capital deal).

Table of Contents
What Are Tag-Along Rights?
Understanding Tag-Along Rights Whereas tag-along rights give minority shareholders negotiating rights in the event of a sale, drag-along rights force the minority shareholders to accept whatever deal is negotiated by majority shareholders. Thus, the three co-founders, using their rights, effectively sell their shares for $30 each.
Tag-along or co-sale rights are essentially the opposite of drag-along rights. Under most states' laws regarding corporations, majority shareholders owe a fiduciary duty to minority shareholders, meaning they must deal with minority shareholders honestly and in good faith. A come-along clause, also referred to as drag-along rights, force minority shareholders to sell their shares when majority shareholders decide to sell theirs.

Tag-Along Rights

A traunch is one of a series of payments to be paid out over a specified period of time, subject to certain performance metrics being achieved.

A traunch is one of a series of payments to be paid out over a specified period, subject to certain performance metrics being achieved. Traunched investments can prove difficult for entrepreneurs by reducing their flexibility and tightening the time available for them to grow their business.
One of the ways that investors seek to mitigate the risks of investing in startup companies is by parceling their capital contributions into separate traunches. From the investor's perspective, dividing an investment into traunches helps reduce risk by allowing the investor to withhold some of the planned funding unless the company demonstrates progress in its business plan. Given that your company's long-term prospects are in question, potential customers and partners might wish to delay signing agreements with your company until it achieves a more secure financial footing. Similarly, the traunch structure can incentivize entrepreneurs to manipulate their performance figures and otherwise mislead investors into believing they are making steady progress toward their mandated goals.

Traunch Defined

A unicorn in business refers to a startup company with a value of over $1 billion. Read about top unicorn companies and how to invest in unicorns.

Unicorn Hunters: These Investors Have Backed The Most Billion-Dollar Companies

Private Unicorn Board Now Above 600 Companies Valued At $2T

Autonomous delivery startup Nuro hits $5 billion valuation on fresh funding of $500 million

Instacart Pushes Its Way To A $13.7B Valuation With New $225M Funding Round

Table of Contents
What Is a Unicorn? Some of the more popular unicorns based in the U.S. include home-sharing giant Airbnb, video game company Epic Games, as well as fintech companies Robinhood and SoFi. Unicorns are typically used to describe privately-held startup companies, so Amazon is not considered a unicorn company. Unless you are a private investor or venture capitalist, unicorns being startup companies don't really accept a lot of moderately-sized investments. Unicorn is the term used in the venture capital industry to describe a startup company with a value of over $1 billion.

Unicorn

Venture capital funds invest in early-stage companies and help get them off the ground through funding and guidance, aiming to exit at a profit. 

Venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups and small- to medium-sized enterprises with strong growth potential. Though the expected return varies based on industry and risk profile, venture capital funds typically aim for a gross internal rate of return around 30%.
Venture capitalists and venture capital firms fund several different types of businesses, from dotcom companies to biotech and peer-to-peer finance companies. They generally open up a fund, take in money from high-net-worth individuals, companies seeking alternative investments exposure, and other venture funds, then invest that money into a number of smaller startups known as the VC fund's portfolio companies. Venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups and small- to medium-sized enterprises with strong growth potential. Venture capital funds are private equity investment vehicles that seek to invest in firms that have high-risk/high-return profiles, based on a company's size, assets, and stage of product development.

Venture Capital Funds

Venture philanthropy is the application or redirection of principles of traditional venture capital financing to achieve philanthropic endeavors.

Venture philanthropy is the application or redirection of principles of traditional venture capital (VC) financing to achieve philanthropic endeavors. Strategically, most of these practices are drawn from successful venture capital initiatives but judge the efficacy of the organization on standards like overall social impact, which depart from the usual standards of a successful venture capital investment being focused only on economic profit. These include private foundations owned or supported by wealthy individuals (like the Bill & Melinda Gates Foundation), government or university grants designed to support philanthropic endeavors, philanthropic investing arms of major investing institutions, or charities which encourage large or institutional donations. Oftentimes, major donors will sit on the boards of organizations they support and they generally have intimate involvement in operational or managerial aspects of the business.
Venture philanthropy ventures generally focus on building capital and scale
Such VCs will also provide non-financial support, like offering executive advice, marketing the initiatives using their own platforms, and measuring performance. It is an umbrella term that can be used to refer shorthand to many different kinds of philanthropic investing, but notably, it is distinct from impact investing, which places more emphasis on turning a profit while nevertheless investing in ventures that address social concerns.

Venture Philanthropy

Venture capital is money, technical, or managerial expertise provided by investors to startup firms with long-term growth potential.

Innovation and the Creation of Venture Capital Organizations

Organizing Venture Capital: The Rise and Demise of American Research & Development Corporation, 1946-1973

U.S. Venture Capital Funding Reaches Dot-Com Era Level

Best Practices in State and Regional Innovation Initiatives: Competing in the 21st Century

Report to Congress on the Capital Gains Tax Reductions of 1978

H.R.4242 - Economic Recovery Tax Act of 1981

After the Dot-Com Bubble: Silicon Valley High-Tech Employment and Wages in 2001 and 2008

Value of Venture Capital Investment in the United States in 1st Quarter 2021, by Industry

The Truth About Bain: Inside the House That Mitt Built

Starbucks Commits $100 Million as Cornerstone Investor in Valor Siren Ventures I

Table of Contents
What Is Venture Capital?
Understanding Venture Capital
History of Venture Capital
Angel Investors
The Venture Capital Process
A Day In The VC Life
Trends in Venture Capital
The Bottom Line
Frequently Asked Questions
Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. One important difference between venture capital and other private equity deals, however, is that venture capital tends to focus on emerging companies seeking substantial funds for the first time, while private equity tends to fund larger, more established companies that are seeking an equity infusion or a chance for company founders to transfer some of their ownership stakes. Table of Contents
What Is Venture Capital?
Understanding Venture Capital
History of Venture Capital
Angel Investors
The Venture Capital Process
A Day In The VC Life
Trends in Venture Capital
The Bottom Line
Frequently Asked Questions
Venture capital (VC) is a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential. For small businesses, or for up-and-coming businesses in emerging industries, venture capital is generally provided by high net worth individuals (HNWIs) — also often known as ‘angel investors’ — and venture capital firms. In a venture capital deal, large ownership chunks of a company are created and sold to a few investors through independent limited partnerships that are established by venture capital firms.

Venture Capital

A venture capitalist (VC) is an investor who provides capital to firms that exhibit high growth potential in exchange for an equity stake.

Table of Contents
What Is a Venture Capitalist (VC)? Those licenses “qualified private equity fund managers and provide(d)s them with access to low-cost, government-guaranteed capital to make investments in U.S. small businesses.”
Venture capital, by its nature, invests in new businesses with high potential for growth but also an amount of risk substantial enough to scare off banks. It wasn’t until about the mid-1990s that venture capital investments started back with any real vigor, only to take a hit in the early 2000s when so many tech companies fell apart prompting venture capital investors to sell off what investments they had at a substantial loss. Well-known venture capitalists include Jim Breyer, an early Facebook (FB) investor, Peter Fenton, an investor in Twitter (TWTR), Peter Theil, the co-founder of PayPal (PYPL) and Facebook's first investor, Jeremy Levine, the largest investor in Pinterest, and Chris Sacca, an early investor in Twitter and ride-share company Uber. All partners have part ownership over the fund, but it is the VC firm that controls where the fund is invested, usually into businesses or ventures that most banks or capital markets would consider too risky for investment.

Venture Capitalist (VC)

A vulture capitalist is an investor who purchases troubled companies on the cheap and then does whatever it takes to revive and make a profit from them.

A vulture capitalist is an investor who seeks to extract value from companies in decline. VCs also provide funding to companies unable to secure financing elsewhere; the primary difference between vulture capitalists and VCs is that the success of a VCs investments hinges on the targeted companies excelling and living up to their potential. The way that vulture capitalists and venture capitalists (VCs) operate and choose to invest their money varies considerably. Most vulture capitalists will buy companies at a very low price to maximize the potential of higher returns and minimize the risk of walking away empty-handed. At the same time, vulture capitalists explore ways to profit from the demise of the companies they invest in.

Private Equity and Venture Cap

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