What is venture capital investment?

1. For new companies or ventures that have limited history, venture capital is a popular source of raising capital at the early stage.

2. The venture capitalist usually gets equity or ownership stake in the company and hence becomes an integral part of the decision-making in the company.

3. The venture capitalist provides the company with not just monetary support but also mentorship and help in the form of technical or managerial expertise.


4. Venture capital is a high risk investment with the potential for above-average returns making it an attractive proposition for the investor.

5. Industry, management, business plans and growth projections are the key factors evaluated before providing the funding.


The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.