Venture capital financing

Short description: Type of High-Risk/High-Reward Funding of a High Growth Potential Company

Venture capital financing is a type of funding by venture capital. It is private equity capital that can be provided at various stages or funding rounds. Common funding rounds include early-stage seed funding in high-potential, growth companies (startup companies) and growth funding (also referred to as series A). Funding is provided in the interest of generating a return on investment or ROI through an eventual exit through a share sale to an investment body, another trading company or to the general public via an Initial public offering (IPO).

Venture Capital can be made in four methods:

1. Equity Financing;
2. Conditional Loan;
3. Income Note; and
4. Participating Debenture.

## See also

* Corporate venture capital
* Market research
* Market segmentation
* Revenue based financing
* Pricing
* SWORD-financing
* Venture capital
* Cap Tables

## References

## Further reading

* Ruhnka, Tyzoon T. Tyebjee, Albert V. Bruno (1984). "A Model of Venture Capitalist Investment Activity". Management science. Volume: 30, Issue: 9 (September 1984), pp. 1051–1066.
* Frederick D. Lipman (1998). "Financing Your Business with Venture Capital: Strategies to Grow Your Enterprise with Outside Investors". Prima Lifestyles. (November 15, 1998).

{{Navbox

| name = Private equity and venture capital

| state = autocollapse | title = [[Finance:Private equitPrivate equity and venture capital

| image =
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| group1 = Basic investment types | list1 =

* Buyout
* Venture
* Mezzanine
* Growth
* Secondaries
* Equity co-investment

| group2 = History | list2 =

* History of private equity and venture capital
* Early history of private equity
* Private equity in the 1980s
* Private equity in the 1990s
* Private equity in the 2000s

| group3 = Terms and concepts

| list3 =

Buyout|

* Financial sponsor
* Management buyout
* Divisional buyout
* Buy–sell agreement
* Leveraged recapitalization
* Dividend recapitalization

|

Venture|

* Angel investor
* Business incubator
* Post-money valuation
* Pre-money valuation
* Seed money
* Startup company
* Venture capital financing
* Venture debt
* Venture round

Structure|

* Private equity firms and funds
* Limited partnership
* Limited liability company
* Carried interest
* Management fee
* Publicly traded private equity
* Business Development Company
* Venture capital trust
* Private investment in public equity (PIPE)
* Pledge fund

| group4 = Investors | list4 =

* Corporations
* Institutional investors
* Pension funds
* Insurance companies
* Fund of funds
* Endowments
* Foundations
* Investment banks
* Merchant banks
* Commercial banks
* High-net-worth individuals
* Family offices
* Sovereign wealth funds
* Crowdfunding

| group5 = Related financial terms | list5 =

* AUM
* Cap table
* Capital call
* Capital commitment
* Capital structure
* Distribution waterfall
* EBITDA
* Envy ratio
* High-yield debt
* IPO
* IRR
* Leverage
* Liquidation preference
* M&A
* PME
* Taxation of private equity and hedge funds
* Undercapitalization
* Vintage year

| below =

* Private equity and venture capital investors
* Private equity firms
* Venture capital firms
* Angel investors
* Portfolio companies

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