Venture capital is the abbreviation of venture capital. Venture capital refers to the activities of professional investors (venture capitalists) to provide financing for high-tech startups. Different from ordinary investors, venture capitalists not only invest money, but also use their long-term accumulated experience, knowledge and information network to help enterprise managers run enterprises better.
Therefore, venture capital institutions are institutions engaged in providing financing for high-tech startups. As the China stock market is about to enter the Year of the Golden Rat in 2008, a new term that seems to be the latest but has been mentioned for a long time, that is, the concept of venture capital, corresponds to the Growth Enterprise Market.
Venture capital is a kind of private equity investment in the form of equity capital. Its investment operation mode is that the investment company invests in start-ups or high-growth enterprises, occupies the shares of the invested company, and cashes in at the right time.
Venture capital companies only invest in unlisted enterprises. Their interest lies not in owning and operating venture enterprises, but in quitting and finally realizing investment income. Because the capital of venture capital is much lower than the liquidity of investment capital in the open stock market, the rate of return it pursues is relatively higher.
The purpose of venture capital:
The purpose of venture capital is mainly to develop new technologies and products. The investment targets are those enterprises with high risks but high potential returns, which are usually in the initial stage or immature stage, but may develop rapidly and are expected to become small and medium-sized enterprises with good development prospects in the future.
At this stage, enterprises often have great uncertainties in market prospects, technical and product feasibility, management and operation, and the lack of information in all aspects leads to the serious adverse selection of investors by fund demanders, so investors must conduct extensive, in-depth and detailed investigation and screening of projects.