Venture capital refers to funds invested in small companies or startups that have long-term growth potential. These young companies often do not have the capacity or history to raise funds through traditional means. The individual or organization that invests in these companies is referred to as a venture capitalist, and this person assumes a high level of risk. However, due to the possibility of significant growth, venture capital investments can offer above-average returns.
Depending on their position and field of expertise, a venture capitalist can also offer consulting for companies in which they invest. This way, they can influence with the firm’s organizational growth.