What is the purpose of 'Venture capital industry'?

Shoaib..

Thanks for your question.  From the National Venture Capital
Association:

"Venture capital is money provided by professionals who invest
alongside management in young, rapidly growing companies that have the
potential to develop into significant economic contributors. Venture
capital is an important source of equity for start-up companies.

Professionally managed venture capital firms generally are private
partnerships or closely-held corporations funded by private and public
pension funds, endowment funds, foundations, corporations, wealthy
individuals, foreign investors, and the venture capitalists
themselves.

Venture capitalists generally:

Finance new and rapidly growing companies; 
Purchase equity securities; 
Assist in the development of new products or services; 
Add value to the company through active participation; 
Take higher risks with the expectation of higher rewards; 
Have a long-term orientation 
When considering an investment, venture capitalists carefully screen
the technical and business merits of the proposed company. Venture
capitalists only invest in a small percentage of the businesses they
review and have a long-term perspective. Going forward, they actively
work with the company's management by contributing their experience
and business savvy gained from helping other companies with similar
growth challenges.

Venture capitalists mitigate the risk of venture investing by
developing a portfolio of young companies in a single venture fund.
Many times they will co-invest with other professional venture capital
firms. In addition, many venture partnership will manage multiple
funds simultaneously. For decades, venture capitalists have nurtured
the growth of America's high technology and entrepreneurial
communities resulting in significant job creation, economic growth and
international competitiveness. Companies such as Digital Equipment
Corporation, Apple, Federal Express, Compaq, Sun Microsystems, Intel,
Microsoft and Genentech are famous examples of companies that received
venture capital early in their development."
What is Venture Capital?
http://www.nvca.org/def.html

Thanks again for your question.  If you need any additional
clarification, please let me know prior to rating my answer.

Regards,

-THV

Search Strategy:
"venture capital industry"

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Request for Answer Clarification by shoaib-ga on 02 Feb 2003 05:44 PST

Hello tar_heel_v-ga and thanks for your excellent answer but please
provide to me a little more clarification of it. I want to  know that
international venture capital firms which provide venture capital for
across the industry sectors(for example real estate,
telecommunication, sports etc) can provide loan for 'any  purpose' for
that particular industry sector?  For  example if I  apply for
mortgage loan for  individual  to the international venture capital
firms which provide property  loans  for  across  the real estate
industry sectors, then it shall  be able to provide to me the mortgage
loan for property purchase?  Please provide 'confirmation' of that
statement. Thanks.

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Clarification of Answer by tar_heel_v-ga on 02 Feb 2003 09:47 PST

shoaib,

I am glad you are pleased with the answer I provided.  However, your
clarification request is going beyond the scope of the original
question, which was "What is the purpose of 'Venture Capital
Industry'?"  I would recommend you post another question asking the
specific question posed in your clarification request.  That way, you
can get a very detailed and specific answer to that particular
question.

Regards,

-THV

Excellent answer has been provided to me by tar_heel_v-ga. Many thanks
to him from Shoaib-ga.