Venture Capital

Paper Summary:

This paper discusses venture capital as an investment strategy and as an element in portfolio management, noting that venture capital involves making investments in relatively unproven and high-risk enterprises, and it is generally expected that such an investment will yield a greater return than other types of investment. The paper shows that venture capitalists are also much more involved in the management of the business after making the investment, such as becoming members of the board of directors.

From the Paper:

"Venture capital is a form of investment in start-ups of one type or another, and such investments are exempt from the registration requirements of the Securities Act. Private placement investments can be made by individuals, by institutional investors, or by other businesses, but a particular type of private placement involves the provision of funds and other resources by one or more professional venture capitalists. Venture capital involves making investments in relatively unproven and high-risk enterprises, and it is generally expected that such an investment will yield a greater return than other types of investment. Venture capitalists are also much more involved in the management of the business after making the investment, such as becoming members of the board of directors: Although a venture capital investor may be a single individual, most venture capitalists are organized as a limited partnership."

More papers on Venture Capital:

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