Advantages And Disadvantages Of Venture Capital

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CHAPTER-3 VENTURE CAPITAL 3.1 MEANING:- Venture capital is a private and institutional investment made to new start-up companies. It also involves risk means uncertain outcome in the expectation of huge profit. The term venture capital means financing that investors provide to startup companies and small businesses that are believe to be having long term growth potential. It is defined as “venture capital fund” under section 2(m) of the SEBI (Venture Capital Fund) Regulations, 1996. Under section 2(m) “venture capital fund” means a fund established in the form of a trust or a company including a body corporate and registered under these regulations which— (i) has a dedicated pool of capital; (ii) raised in a manner specified in the regulations; and (iii) invests in accordance with the regulations. Venture capital refers to the commitment of capital and knowledge for the formation and setting up of the companies particularly to those specializing in new ideas and new technologies. When the venture capitalist invests the money the businesses are small and exist only as an initiative but have high potential to grow. Venture capitalist means person who invest the money. Venture capitalists have the power to influence the major decisions of the company as they invested in stake and share of the growing company. In venture capital investment there is a risk of losing the money if the venture doesn’t succeed…show more content…
 The venture capital financing is a long investment procedure and it is complex to get the money early. Once you invest the money you have to wait until company makes the profit.  It is uncertain way of investment and investment is very risky. 3.6 Need and Importance of venture

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