Lesson 1 Flashcards
(27 cards)
Venture Capital
involves providing financial resources, expertise, and guidance to early-stage companies in exchange for equity.
Venture Capital
refers to a form of private equity investment that focuses on providing capital and support to early-stage companies with high growth potential also involves investors
Venture Capital
who allocate funds to startups in exchange for an ownership stake in the company
venture capitalists
Role of Venture Capital:
- Plays a crucial role in** fostering innovation, driving economic growth, and creating job opportunities.**
- It provides the necessary funding for startups to develop and launch their products or services, scale their operations, and reach new market.
form of investment that involves capital provided by investors to fund various stages of a company’s development
Private Equity
private equity funding stages of a company’s development:
- startup and early-stage funding
- mature company buyouts
- restructuring.
typically raise funds from institutional and individual investors, pooling these funds together to make investments in privately held companies
Private equity firms
The goal of private equity investments is to —— by improving the operational efficiency, growth, and overall value of the investe companies.
generate strong returns by improving the operational efficiency, growth, and overall value of the invested companies
to the sequence of stages and activities involved in funding and nurturing early-stage companies with high growth potential.
The venture capital cycle
Venture capital (VC) firms play a central role in this cycle, providing —–, —– and —–
funding, expertise, and **guidance **to startups.
Stages of the Venture Capital Cycle
VC firms identify potential investment opportunities through various channels such as networking events, referrals, pitch competitions, and industry research.
Deal Sourcing
Stages of the Venture Capital Cycle
In this stage, VC firms conduct thorough research and analysis to evaluate the startup’s business model, market potential, team, and financials.
Due Diligence
Stages of the Venture Capital Cycle
If the startup passes due diligence, the VC firm provides funding in exchange for equity ownership, usually through rounds of financing (e.g., seed, Series A, Series B).
Investment
Stages of the Venture Capital Cycle
VC firms actively contribute expertise, industry connections, and mentorship to help the startup scale and succeed.
Value Addition
Stages of the Venture Capital Cycle
This stage involves realizing returns on the investment. Common exit strategies include Initial Public Offerings (IPOs) or acquisition by larger companies.
Exit
Key Players in the Venture Capital Process
Founders seeking funding for their startups.
Entrepreneurs
Key Players in the Venture Capital Process
Professionals managing VC funds and making investment decisions.
Venture Capitalists
Key Players in the Venture Capital Process
Institutional and individual investors who provide capital to VC firms.
Limited Partners (LPs)
Key Players in the Venture Capital Process
Individuals who invest their personal funds in startups at an early stage.
Angel Investors
Key Players in the Venture Capital Process
Experienced professionals who offer guidance and support to startups.
Advisors and Mentors
Key Players in the Venture Capital Process
Investment banks, underwriters, or acquirers involved in the exit process.
Exit Partners
Dynamics and Challenges
VC investments carry high risks but offer the potential for substantial returns.
Risk and Return
Dynamics and Challenges
Thorough due diligence is essential to mitigate risks and ensure successful investments.
Due Diligence Complexity
