Definition of Venture Capital Firm



Venture capital firms are financial institutions facilitating venture capitalists or well-off investors to purchase the equity of small private companies with growth potentials that need funds for the first time. The venture capital firm does this through limited partnerships. The venture capitalists own the substantial equity of the company through investment but the business operations are run by the management.

 


Venture capital firms looks for companies with extraordinary high growth potentials and that need funds. Then the firm approaches these investors who want to take risk by putting their funds in these companies.


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