Venture Capitalist

AAA

DEFINITION of 'Venture Capitalist'

An investor who either provides capital to startup ventures or supports small companies that wish to expand but do not have access to public funding. Venture capitalists are willing to invest in such companies because they can earn a massive return on their investments if these companies are a success.

Venture capitalists also experience major losses when their picks fail, but these investors are typically wealthy enough that they can afford to take the risks associated with funding young, unproven companies that appear to have a great idea and a great management team.

INVESTOPEDIA EXPLAINS 'Venture Capitalist'

Well-known venture capitalists include Jim Breyer, an early Facebook investor; Peter Fenton, an investor in Twitter; Peter Theil, the co-founder of PayPal and Facebook's first investor; and Jeremy Levine, the largest investor in Pinterest.

Venture capitalists look for a strong management team, a large potential market and a unique product or service with a strong competitive advantage. They also look for opportunities in industries that they are familiar with, and the chance to own a large percentage of the company so that they can influence its direction.

VIDEO

RELATED TERMS
  1. Adventure Capitalist

    1. Another word for "venture capitalist", or someone who invests ...
  2. Non-Banking Financial Company - ...

    Non-banking financial companies, or NBFCs, are financial institutions ...
  3. Angel Investor

    An investor who provides financial backing for small startups ...
  4. Venture Capital Funds

    An investment fund that manages money from investors seeking ...
  5. Venture Capital

    Money provided by investors to startup firms and small businesses ...
  6. Vulture Capitalist

    1. A slang word for a venture capitalist who deprives an inventor ...
Related Articles
  1. Home & Auto

    The History Of Insurance

    The first written policy appeared in Hammurabi's Code. Find out how it evolved from there.
  2. Entrepreneurship

    How Venture Capitalists Make Investment Choices

    In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists.
  3. Investing

    Georges Doriot And The Birth Of Venture Capital

    Venture capital has been around for centuries, but Georges Doriot turned it into a structured field of investment.
  4. Mutual Funds & ETFs

    How To Invest In Private Equity

    Private Equity might be a pricey investment, but returns are on the rise and the payoff could be big.
  5. Options & Futures

    Pinpoint Takeovers First

    Use these seven steps to discover a takeover before the rest of the market catches on.
  6. Taxes

    Paying Uncle Sam: From Tobacco To $1 Trillion

    The services we rely on, like education, law and security, were built on taxes.
  7. Personal Finance

    Seek An Adventure In Venture Capital

    Make a career out of chasing down the "next big thing".
  8. Entrepreneurship

    Top 9 Venture Capital Interview Questions

    Ace your interview by learning how to break down the most common questions asked.
  9. Entrepreneurship

    The Best (And Worst) Countries To Be An Entrepeneur

    Where you start a business can influence its success. This new World Bank study will help you find the most – and least – favorable economic climates.
  10. Investing News

    Looking to Open a Franchise? These Topped The List In 2014

    These franchise businesses stood out in 2014.

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center