What is venture capital funding?

Where does the money come from?

2 Answers

  • 1 decade ago
    Favorite Answer

    Venture capital funding is providing money to newly-formed companies that have not yet become successful. Venture capital investments are very risky because a large proportion of new businesses are unsuccessful. However, if the business does become successful, the venture capitalists will make a great deal of money because they came in at the beginning and generally purchased a substantial proportion of the new company.

    Where does the money come from? Most of the money comes from wealthy investors, large pension funds and hedge funds. They hire people to look for promising start-up companies, and provide them with the initial capital to get them started.

  • 1 decade ago

    Venture capital firms find attractive investment opportunities. In exchange for equity/start up, they seek positions on the board of directors / managers so they have more control of their investment.

Still have questions? Get your answers by asking now.