Anyone new to investing or trying to finance a startup biotech business, will likely come across this term quite often. For new entrepreneurs inexperienced in raising equity for fledgling businesses, this answers the question "what exactly is Venture Capital?"
Venture Capital is money made available for investment into research, development and marketing of new innovations, particularly in high technology areas where the potential for profit is great, but, likewise, risk of loss is considerable. Venture Capital is also sometimes referred to as "Risk Capital".
Venture Capital funds are in the form of private equity, often exchanged for part ownership or shares in the new business, from professionals or institutionally-backed outside investors (Venture Capitalists), willing to back projects that are too risky for bank loans or standard capital markets.