Definition of venture capital

Definition

Venture capital is a form of financing for early-stage companies that individual investors or investment firms provide in exchange for partial ownership, or equity, in a company. These investors are called venture capitalists (or VCs). Venture capitalists invest in companies they perceive to be capable of growing quickly and commanding significant market share. “Venture” refers to the risky nature of investing in early-stage businesses—typically startups—with unproven business models.

Related terms

More from The Holloway Guide to Equity Compensation

Startups and Growth › Fundraising, growth, and dilution

A startup goes through several stages of growth as it raises capital based on the hope and expectation that the company will grow and make more money in the future.

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The Holloway Guide to Equity Compensation
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