Features of Venture Capital Financing

Under venture capital finance the lender provides financial support to a company which is in early stage of development, though it involves risk but at the same time is has the potential for generating abnormal returns for venture capitalist. Given below are some of the features of venture capital –

1. Venture capital involves not only investing money but also active participation in the management of the company by the person who has made investments in the company.

2. Venture capitalist divests his or her holding once the investments has generated returns in accordance with the venture capitalist desired return.

3. Venture Capital Financing is in the form of equity participation rather than giving it as loan or debt.

4. Venture Capital Financing is usually done for companies which are small level or medium level and also relatively newly formed companies are the preferred choice of venture capitalist.

5. Venture capitalist does Venture Capital Financing in order to make a capital gain on equity investment at the time of exit.

1 comment… add one
  • miria

    thanks so much for the notes, at least i have an idea now about venture capital

Leave a Comment


Related pages


what is trial balance & why it is preparedwhats a direct quotetypes of dividend policiesunearned service revenue still unearned journal entryadvantage and disadvantages of social mediaslr and crrimplications of capmconglomerate merger examplesconsumer durable goods examplesunbilled accounts receivable journal entryconglomerate acquisitionloan capital advantages and disadvantagesfull form kpmgunitary elastic examplecurrent cost accounting advantages and disadvantagesfactors affecting elasticityjob costing process costingwhat are the advantages of barter systemadvantage and disadvantage of mixed economyadvantages of conglomerate integrationexample of a horizontal mergerdescribe a traditional economypayment received in advance journal entryaccumulated depreciation exampledifference between fdi and fiiwhat is the difference between tariff and quotaunsystematic risk examplesforeign exchange reserves of india meaningexample of debit noteadvantages and disadvantages of mixed economy pdfcountries with planned economiesadvantages of command systemwhat is oligopoly markettypes of financial marketmeaning of devaluation of currencydefine junk bondsjob costing advantagesdisadvantages of dictatorshipdefine consignordistinguish between trade discount and cash discountdividend wikidefinition of chequesadvantages and disadvantages of financial statementtrial balance is preparedmixed economies advantages and disadvantagesadvantages and disadvantages of advertisementexamples of inelasticproduct bundling pricingexplain the barter systemdefinition of substitute goods in economicsbenefit of ppfexamples of penetration pricingbenefits of cashless societypublic goods pptdurable vs nondurable goodsbartering system definitiondeferred income journal entryaccording to the law of diminishing marginal utilityadvantage of jitexample of explicit costadvantage of socialismwho is consignor and consigneedisadvantages of organisation structurepenetration pricing strategy pdfdirect expenses and indirect expenses in accountingupselling examplesdifference between order cheque and bearer chequethree golden rules of accounting with examplebarter trade systemwhat are the different types of dividend policiesadvantages and disadvantages of lifo and fifosalary received journal entry