Developing a strategy for fundraising for an emerging venture capital fund

Abstract

Venture Capital is a form of private equity investing that is provided to early-stage companies and small business that exhibit long term growth potential in the form of patient financial capital, technical or managerial expertise. It can be provided at various stages of a startups evolution but is most often associated with early and seed round fund raises. Limited partnership agreements are typically used by institutional and individual investors to make private equity investments thus forming Venture Capital Funds which manages pooled investments in such high growth opportunities for accredited investors who take the risks in anticipation of attractive payoffs. These agreements let investors participate in a range of venture capital projects while maintaining limited liability (of the initial investment). Like private equity funds, venture capital funds manage their portfolio of invested companies according to a sector expertise. For instance, a venture capital firm focused on the healthcare industry would invest in a portfolio of businesses developing innovative medical devices and technologies.