Venture capital firm

Venture capital firms are investment firms that use the capital raised from limited partners or partnerships (LPs) to fund companies, often start-ups. Venture capital firms are not to be confused with venture capital funds, which refersrefer to the pool of investment money raised by LPs and given to the firm. Firms can then disperse the money as they see fit. In exchange for an investment, venture capital firms often receive a minority stake in the funded company. Firms nearly always manage more than one investment at a time. Investments typically last from six to ten years.

Venture capital provides money for start-ups, small businesses, and other ventures that are considered risky or innovative by investors. Venture capital is typically invested in private companies rather than publicly traded ones. The key to success for venture capitalists is the ability to identify high-potential startups and then invest their resources into them before they take off and become profitable ventures.