Venture capital
Venture capital is the money invested in start-ups and small businesses that have high growth potential but are often not yet profitable. This type of financing is provided by venture capitalists, who provide venture capital in exchange for a share of the company. These are often companies that are still new and cannot easily get a regular loan from a bank.
Venture capitalists are not only lenders, but they also help these companies with advice and contacts. You see this type of financing especially in sectors such as technology and biotechnology, where innovation plays an important role. These investments can be very important for the economy because they stimulate innovation and growth.
Benefits of venture capital for venture capitalists
Venture capital benefits not only startup companies, but also venture capitalists themselves. They invest in promising startups, hoping to earn handsome returns as these companies become successful and more valuable. While there are always risks, one successful investment can make up for the loss of several failed investments. This motivates venture capitalists to support innovative and entrepreneurial companies.
