A Look into the Venture Capital Industry
Scaling a startup is not easy, even if it has high growth potential. To get the necessary capital, expertise, and experience to grow, sometimes tech founders look to venture capitalists to solve the problem.
For the uninitiated, venture capital is financial capital raised by a group of investors for high-growth ventures in exchange for an equity stake in the company. The companies receiving this funding usually have a unique technology or business model that could have potential to make billions of dollars.
Unlike more traditional forms of investment such as stocks and bonds, venture capital tends to be put in companies that are private and are thus not trading in a liquid market. As a result, venture capitalists are not able to easily get their investments back. An exit, or liquidity event, must occur such as an IPO, merger, or acquisition.