Venture capital is a source of equity normally reserved for businesses that have advanced past their initial development stages and have promising potential. Individual venture capitalists or venture capitalist firms typically invest cash in young companies with a potential for high growth in an exchange for controlling stock options or managerial interest in the company.
Venture capitalists assume a significant amount of risk by providing unsecured assets to fledgling companies in the hopes that they will receive substantial returns. Because venture capitalists assume significantly more investment risk, they review a company’s business plan before deciding to invest. Once an investment has been made, most seek significant company involvement in order to monitor a vested company’s performance.
Area venture groups include: