Venture Capital
Venture capital (VC) is a form of private equity financing provided by investors to startups and small businesses with high growth potential. Venture capitalists typically invest in exchange for equity or ownership stakes in the company. VC funding is critical for early-stage companies that may not have access to traditional financing options like bank loans.
Example
A venture capital firm invests $5 million in a tech startup in exchange for a 20% ownership stake, helping the startup scale its operations and develop new products.
Key points
• Private equity financing provided to startups and early-stage businesses.
• Venture capitalists invest in exchange for equity or ownership stakes.
• Offers both financial support and strategic guidance to high-growth potential companies.
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