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Venture Capital (VC) is a form of private equity and a type of financing for startup companies and small businesses with long-term growth potential.
Venture Capital generally comes from investors, investment banks, and financial institutions. Venture capital can also be provided as technical or managerial expertise.
1. Venture capital (VC) is a form of private equity and a type of financing for startup companies and small businesses with long-term growth potential.
2. Venture capitalists provide backing through financing, technological expertise, or managerial experience.
3. VC firms raise money from limited partners (LPs) to invest in promising startups or even larger venture funds.
Types of Venture Capital
- Pre-Seed: This is the earliest stage of business development when the startup founders try to turn an idea into a concrete business plan. They may enroll in a business accelerator to secure early funding and mentorship.
- Seed Funding: This is the point where a new business seeks to launch its first product. Since there are no revenue streams yet, the company will need VCs to fund all of its operations.
- Early-Stage Funding: Once a business has developed a product, it will need additional capital to ramp up production and sales before it can become self-funding. The business will then need one or more funding rounds, typically denoted incrementally as Series A, Series B, etc.
