After seeing companies like Altassian and BigCommerce securing US venture capital and creation of VC Companies like Startmate and Future Capital , what is all this talk of Venture funding, and what is the Aussie VC scene like?
Part 1: What is Venture Capital?
According to a Treasury report, 'Venture capital is an important vehicle for financing new and innovative high risk ventures.'
In a nutshell, is generally a high risk, high reward investment, and generally occurs in the start up period while the company is unlisted on the stock market. Companies starting out will often seek venture capital, sacrificing a portion of control of a company in exchange for an injection of capital.
Venture capitalists can be 2 types, a professional firm managing a fund, and 'Angel Investors', high wealth individuals who invest their own money (generally into areas where the Angel has a vested interest). VC funding can be attractive when traditional funding (share issue, bank loans) cannot be sourced.