Venture capital facts for kids

Venture capital is a type of private equity capital..

Typically it is provided by outside investors to new businesses that promise to grow fast. Venture capital investments are usually high risk, but offer the potential for above-average returns.

A venture capitalist (VC) is a person who makes such investments. A venture capital fund is a pooled investment vehicle (often a limited partnership) that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans.

Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of rich investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies, or ventures.

Images for kids

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  A highway exit for Sand Hill Road in Menlo Park, California, where many Bay Area venture capital firms are based

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  The technology-heavy NASDAQ Composite index peaked at 5,048 in March 2000 reflecting the high point of the dot-com bubble.

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  Diagram of the structure of a generic venture capital fund

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  Quarterly U.S. Venture Capital Investments 1995-2017

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  Venture capital by state (2016)

See also

In Spanish: Capital riesgo para niños