By Myles Bunyard
Venture Capital (VC) is financial capital which is provided by investors to early-stage, high risk start up companies. Although often deemed ‘high risk’ they have a lot of potential, hence the investment offered. The venture capital fund makes money by owning equity in the company/individual it invests in. This could be in any industry, but the most popular ones with this type of investment tend to be in IT, technology and advanced industries.
This type of investment works well for companies that are new to the market and therefore do not have the operating history that banks require to assess lending risk. The investor takes on the risk that a bank is not willing to take on- but with that comes the opportunity to be at the forefront of a new development or invention that could be hugely profitable in the long-term.