How Venture Capital works?

Venture capital (VC) is a kind of private equity and a manner of providing finance to startup companies and small- size businesses that have the potential to ensure long-term growth. Not only financial support, but the support can also be in the form of required expertise, such as technical or managerial.

What is venture capital?

Venture capital (VC) is a kind of private equity and a manner of providing finance to startup companies and small- size businesses that have the potential to ensure long-term growth. Venture capitalists are generally well-off investors, investment banks, and other financial institutions. 

However, financial support is not always provided in a monetary form. The support can be in the form of required expertise, such as technical or managerial. 

How is a venture capitalist different from an angel investor?

The points highlighting the venture capitalist vs. angel investor are:

• A venture capitalist is bound by the terms and conditions of a company or a firm, whereas an angel investor is independent.
• A venture capitalist does not always provide monetary support. It supports in several ways, such as providing a strong, competitive product or assistance through a talented management team and well-covered market potential. In contrast, the support from the angel investors is mainly limited to financial support.
• A venture capitalist usually invests in a startup that shows an appealing potential for growth, whereas the angel investors are usually involved at the early-stage startup.
• Venture capitalists involve in more diverse roles than angel investors.

How is private equity different from venture capital?

The key points of venture capital vs. private equity are as follows:

1. Venture capital firms mainly invest in startups showing high growth potential, whereas private equity firms aim to buy the business to streamline the revenue generated.

2. The venture capital firms divide the risk and invest in many several companies. On failure of one startup, the entire fund in the venture capital firm is not impacted substantially. On the other hand, the private equity firms acquire the total ownership of the business.

Who are the top venture capitalists in India?

Certain venture capitalist examples in India are as follows:

1. Helion Venture Partners: They invest in businesses involving consumer service and technology power. They have funded MakemyTrip, Yepme, NetAmbit, TAXI For Sure, Komli, and PubMatic.

2. Accel Partners: Founded in 1983, Accel Partners has a global presence in internet technology companies and funded Flipkart, Freshdesk, BabyOye, Book My Show, Myntra, Zansaar, Probe, and CommonFloor.

3. Blume Ventures: They mainly seed fund early-stage startups and are involved in pre-series A, Series B, and late-stage investments. They actively mentor and support Carbon Clean Solutions, Exotel, Audio Compass, EKI Communications, and Printo.

4. Sequoia Capital India: They are specialized in investments in startup seed, early, mid, later, elaboration, public and growth-stage companies. They have funded JustDial, Practo, bankbazaar.com, Knowlarity, and iYogi.

5. Nexus Venture Partners: They are a venture capital firm investing in early-stage and growth-stage startups in India and United States. They have funded Snapdeal, Delhivery, Housing, ScaleArc, Komli, and PubMatic.

How much is the venture capitalist salary in India?

The income of the venture capitalist varies depending on the company he is being involved. According to Glassdoor, the average salary of a venture capitalist per year is ₹42,42,893.