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What Is Venture Capital?

Venture capital is a type of high-risk investment in which an investor buys part of a company in exchange for money.

Venture capital plays an important role in a startup’s growth.

  • Company development

    1. Idea/start
    2. Development
    3. Growth
    4. Maturity

  • Investment stages

    1. Seed and angel
    2. Early-stage VC
    3. Late-stage VC
    4. Exit

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Two Laws of Venture Capital

  1. Negroponte’s Law: Every atom that can become bits will become bits.
  2. Moore’s Law: Processing capacity doubles every 18 months.

These two laws contribute to greater digitization at lower cost and in less time.

The History of Venture Capital

Whenever people have created something new, someone has invested money to make it happen. That is venture capital.

Whaling was important in Europe for a period. It became a high-risk industry because voyages lasted from 3 to 11 years. The outcome was all or nothing, and only 2 out of 3 ships were likely to return successfully.

  • Capital providers (limited partners)
    • VC firm (general partners)
      • Fund 1
        • Entrepreneur
          • Team
          • Team
        • Entrepreneur
          • Team
          • Team
      • Fund 2
        • Entrepreneur
          • Team
          • Team
        • Entrepreneur
          • Team
          • Team