Definition

Venture capital (noun): Money provided by investors to startup companies and small businesses that are believed to have long-term growth potential. This is a form of financing that involves high risk for the investor, with the expectation of commensurate high returns if the company succeeds.

Usage

Venture capital is typically provided by specialized firms or funds (venture capitalists) to early-stage, high-potential companies in exchange for equity (an ownership stake). It is a critical source of funding for innovative companies that may be too risky for traditional bank loans.

Examples

• The tech startup secured venture capital to develop its prototype and launch its first product.
• Many Silicon Valley companies were initially funded by venture capital.
• The entrepreneur spent months pitching her business plan to venture capital firms.

Advanced Usage

• "To raise venture capital": The process by which a company seeks and obtains funding from venture capitalists.
  • The founders traveled to San Francisco to raise venture capital for their AI software.
• "Venture capital-backed": Describes a company that has received investment from venture capitalists.
  • She works for a venture capital-backed biotech firm.

Variants and Related Words

• Venture capitalist (noun): An investor who provides venture capital, either as an individual or as part of a firm.
  • The venture capitalist saw great potential in the young company.
• VC (noun): A common abbreviation for both "venture capital" and "venture capitalist."
  • The industry report tracked VC investments in the fintech sector.

Synonyms

• Risk capital: Emphasizes the high-risk nature of the investment.
• Startup funding: A more general term for early-stage financing.

Related Phrases

• Seed funding/Seed capital: An earlier, typically smaller, round of investment that precedes formal venture capital.
• Private equity: A broader category of investment in private companies, which includes venture capital as a subset focused on early and expansion stages.

Noun

1. wealth available for investment in new or speculative enterprises