The Venture
Capital Industry
nWhat
Venture Capitalists Do:
¨Invest
directly in new and rapidly-growing private companies in exchange for
equity
¨Raise
money from corporations, financial institutions, private
foundations, and high net-worth individuals
¨Sit
on the Board of Directors and add value to the company through
active participation and industry expertise
¨Take
higher risks and sacrifice short-term liquidity with the expectation
of higher rewards in the long-term
¨Make
money through management fees (typically 1 - 2.5% of
the fund’s capital commitments) and carried interest (typically
15 - 30% of gross profits)
