A Venture Capital typically invest in companies that are in the
process of developing a new product or service, or that are in the early stages
of commercialization. They typically do not invest in companies that are
already generating significant revenue.
There are a number of other terms that are
commonly used in the financing of startups. These include:
Equity: Equity is a type of ownership stake in a
company. When an investor provides capital to a startup in exchange for equity,
they are essentially buying a piece of the company. The amount of equity an
investor receives will depend on the amount of money they invest and the
valuation of the company.
Valuation: The valuation of a startup is the process of
determining how much the company is worth. This is typically done by
considering factors such as the company's revenue, profit potential, and the
market opportunity.
Due diligence: due diligence is the process of investigating a
company before making an investment. This includes reviewing financial
statements, assessing the management team, and conducting market research.
VENTURE CAPITALIST - a seasoned investor who recognizes growth
potential in your startup and provides funding in exchange for equity in your
company. A venture capitalist usually plays a more active role in the
decision-making process of your venture.