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Profiles

  • Tagg Romney
    Taggart "Tagg" M. Romney (born March 21, 1970) is an American management consultant, businessman, venture capitalist and political advisor. He is the eldest son of businessman and politician Mitt Rom...
  • Peter Thiel
    Peter Andreas Thiel (born October 11, 1967) is an American entrepreneur, venture capitalist, hedge fund manager, and social critic. Thiel co-founded PayPal with Max Levchin and Elon Musk (see PayPal ...
  • Sir Michael Moritz
    Sir Michael Jonathan Moritz KBE (born 12 September 1954) is a Welsh-born venture capitalist with Sequoia Capital in Menlo Park, California in Silicon Valley, a philanthropist and author of the first ...
  • Neil Shen
    Neil Shen (born 1967) is an entrepreneur and investor based in the province of Zhejiang, China. He is the founding and managing partner of Sequoia Capital China. He earned a bachelor’s degree at Sh...
  • Jim Goetz
    Jim Goetz is a venture capitalist at Sequoia Capital in Silicon Valley. Goetz currently sits on the board of directors for Chartboost, Carbon3D, Jive Software, Appirio, Barracuda Networks, Drawbridge...

https://en.wikipedia.org/wiki/Venture_capital

Venture capital (VC) is a type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth (in terms of number of employees, annual revenue, or both). Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake, in the companies they invest in. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the firms they support will become successful. The start-ups are usually based on an innovative technology or business model and they are usually from the high technology industries, such as information technology (IT), clean technology or biotechnology.

The typical venture capital investment occurs after an initial "seed funding" round. The first round of institutional venture capital to fund growth is called the Series A round. Venture capitalists provide this financing in the interest of generating a return through an eventual "exit" event, such as the company selling shares to the public for the first time in an initial public offering (IPO) or doing a merger and acquisition (also known as a "trade sale") of the company.

In addition to angel investing, equity crowdfunding and other seed funding options, venture capital is attractive for new companies with limited operating history that are too small to raise capital in the public markets and have not reached the point where they are able to secure a bank loan or complete a debt offering. In exchange for the high risk that venture capitalists assume by investing in smaller and early-stage companies, venture capitalists usually get significant control over company decisions, in addition to a significant portion of the companies' ownership (and consequently value). Start-ups like Uber, Airbnb, Flipkart, Xiaomi & Didi Chuxing are highly valued startups, where venture capitalists contribute more than financing to these early-stage firms; they also often provide strategic advice to the firm's executives on its business model and marketing strategies.

Venture capital is also a way in which the private and public sectors can construct an institution that systematically creates business networks for the new firms and industries, so that they can progress and develop. This institution helps identify promising new firms and provide them with finance, technical expertise, mentoring, marketing "know-how", and business models. Once integrated into the business network, these firms are more likely to succeed, as they become "nodes" in the search networks for designing and building products in their domain. However, venture capitalists' decisions are often biased, exhibiting for instance overconfidence and illusion of control, much like entrepreneurial decisions in general.