Venture Capital, often shortened to VC, is a form of private equity which finances early-stage companies and start-ups.
This investment is usually given to companies expected to have a high growth potential, or have already shown high growth in terms of revenue and employees.
Venture Capital firms invest in start-ups in exchange for equity, or ownership stake, in the company they are funding.
Today, many start-ups looking for funding are usually from the high technology industries, such as social media or IT. Usually, VC funding only happens after a seed funding round. This is a form of securities offering for companies not usually generating its own cash yet.
Who’s raising money?
Tech companies have become a hot focus for VC investment, with the likes of Funding Circle closing a round of funding that took its total raised to $380 million.
ShapeShift, a digital asset exchange for Bitcoin, Ethereum, Dash, Monero, and other blockchain tokens, is another example of a tech company (in the area of fintech) raising VC money.
ShapeShift raised $10.4m in its Series A funding round.