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Introduction
Venture capital is a long-term fund in equity to finance
hi-tech projects. Venture capital involves high degree of risk. Venture capitalist earns his return from Capital gains. The objective is to earn a high rate of return.
Characteristic Features
a. Investments are made in equity in high tech industry and wait for 5-7 years to recap the benefit of capital gains. b. The claim over the management us decided on the basis of proportion to investments. c. Venture capital investors does not interfere in day-to-day business affairs but closely watches the business unit.
Conclusion
This type of funding is not right for everyone. Those companies who have high growth potential such as electronics manufacturers, green technologies and other high tech ventures are usually the ones who fare best with Venture Capital funding.
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