Fin 351 SG 4 .docx - QUIZ 4 Venture Capital invest in young...

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QUIZ 4: Venture Capital: invest in young, rapidly growing companies, computer. tech , biotech Types of Venture Capital:Angel Investor: Individual investors who finance companies in their earliest stages of growth. Professionally managed, common practice. Professional Venture Capital Fund: – Independently managed, dedicated pools of capital that focus on equity or equity-linked instruments in privately held, high-growth companies. Corporate Venturers (Corporate Venture Program): – Corporations that offer venture assistance to finance young, promising companies. Such as google, that look for start up and invest in them very young. Strategic driven, they take over such as youtube taken by google, facebook purchased instagram and whatsapp. Importance of Venture Capital : the funding they receive Venture Capital Fund : Independently managed, dedicated pools of capital that focus on equity or equity-linked instruments in privately held, high-growth companies.A VC firm typically raises money through a partnership (the VC fund), and invests the money in new ventures. Venture capitalists work for the VC firm, and are general partners in the partnerships. What do Venture Capitalist: Raise money from corporations, financial institutions, private foundations, and high net- worth individuals, Invest directly in new and rapidly-growing private companies in exchange for equity, Sit on Board of Directors and add value to the company through active participation and industry expertise, Take higher risks and sacrifice short-term liquidity with the expectation of higher rewards in the long term. Exiting VC Investment: Investors in private equity cannot (easily) liquidate their investment by selling their stock, Exit strategies: Merger and
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