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Venture Capital

Venture capital (VC) is a type of private equity investment where firms provide funding to early-stage companies in exchange for equity ownership, aiming for high returns despite the associated risks. Startups seek VC funding for capital to grow, gain credibility, and access valuable expertise and networks. The investment process involves several stages, from seed funding to exit strategies like IPOs or acquisitions.

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Shantanu Jana
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9 views

Venture Capital

Venture capital (VC) is a type of private equity investment where firms provide funding to early-stage companies in exchange for equity ownership, aiming for high returns despite the associated risks. Startups seek VC funding for capital to grow, gain credibility, and access valuable expertise and networks. The investment process involves several stages, from seed funding to exit strategies like IPOs or acquisitions.

Uploaded by

Shantanu Jana
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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EXPLORING THE WORLD OF

VENTURE CAPITAL
What is Venture Capital (VC)?
Venture capital is a form of private equity
investment where VC firms invest money in
early-stage, high-potential companies in
exchange for equity ownership.

These investments are typically made in


startups or small businesses with significant
growth potential.
Venture capitalist firms (VCs) provide
financial support and strategic guidance to
help these companies grow and succeed.

VC investments are considered high-risk,


high-reward, as many startups may fail, but
successful ones can yield substantial returns.
Where does Venture Capital
come from?
Venture capital firms or venture capital funds are
the primary sources of VC funding.

VC firms raise funds from institutional investors,


such as pension funds and wealthy individuals,
and use that capital to make high-risk,
high-reward investments in startups.

VC firms typically have experienced investment


professionals who identify & evaluate investment
opportunities and make investment decisions.
Why do Startups seek VC
Funding?

VC funding provides them with the necessary


capital to fuel growth, expand operations, and
enter new markets.

Additionally, securing funding from reputable VC


firms lends validation and credibility to startups,
attracting customers and partners.

VCs bring expertise, industry knowledge, and a


valuable network of connections.
Stages of VC Investment

01 Seed Stage
Startups at this stage are often in the ideation or
early product development phase. Seed-stage
funding helps founders turn their ideas into viable
businesses.

02 Early Stage
Early-stage funding helps startups refine their
product, build traction, and establish a customer
base. The focus is on scaling operations and
establishing a strong market presence.
03 Growth Stage
Capital is provided to fuel rapid expansion, enter
new markets, and scale operations. Startups at
this stage have achieved market validation and
aim to capture a larger market share.

04 Mezzanine Stage
This transitional phase occurs before a potential
exit event, such as an IPO or acquisition.
Additional capital is invested to support further
growth or strategic initiatives.

05 Exit
The final stage involves realizing returns for
investors. This can occur through an IPO,
where the company goes public, or through
an acquisition by another company.
Venture Capital Angel Investors

VC firms are professional Angel investors, on


investment firms that the other hand, are
manage pooled funds individuals who invest
from institutional investors. their personal funds in
startups.

VCs invest larger amounts Whereas angels make


of capital in startups and smaller investments
have a structured and often invest based
investment process. on their expertise.

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