Venture capital investment is a way in which investors support entrepreneurial talent with finance and business skill to exploit market opportunities to obtain long term capital gain.
It's defined as an equity-related investment in the early stage of the growth-oriented business firm. In return, VC has a minority shareholding in the business and the irrevocable right to acquire it.
Five important things that happen in Venture Capital investment
- It works in new companies to raise fund
- It is a long-term investment in a growth-oriented firm.
- Active involvement of VC firm to managements and skills
- High risk-return spectrum
- It is early finance to firms until they are established