Venture capital
- A way of raising finance where shares in your company (equity) is exchanged for a sum of money.
- Venture capital is a common source of funding for small or growing businesses that have little or no money of their own to risk. Venture capitalists invest in these businesses with the prospect of a large return if the company takes off
- Investors will want to make sure they make a return on their investment so may specify, or be involved in, what the money is used for
- Investors can be private individuals or a partnership of businesses
- Some of the advantages are that venture capitalists may have the ability to invest large sums of money which can help your business to develop and achieve fast growth. Investors also have a wealth of experience to help you in achieving the most out of the investment
- Some of the disadvantages are that venture capital may come with some conditions or involvement from the investors, for example venture capitalists will want to ensure they make money on their investment so may push for decisions that make quick returns.
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