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. The History Of Insurance
    Home & Auto

    The History Of Insurance

  2. How Venture Capitalists Make Investment ...
    Entrepreneurship

    How Venture Capitalists Make Investment ...

  3. Georges Doriot And The Birth Of Venture ...
    Investing

    Georges Doriot And The Birth Of Venture ...

  4. How To Invest In Private Equity
    Mutual Funds & ETFs

    How To Invest In Private Equity

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center