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Venture capital firm

Venture capital firm

Venture capital firms are investment firms that use capital raised from Limited Partnerships (LPs) to fund companies typically in the start-up stage.

Overview

Venture capital firms are investment firms that use capital raised from limited partners or partnerships (LPs) to fund companies, often start-ups. Venture capital firms are not to be confused with venture capital funds, which refers to the pool of investment money raised by LPs and given to the firm. Firms can then disperse the money as they see fit. In exchange for an investment, venture capital firms often receive a minority stake in the funded company. Firms nearly always manage more than one investment at a time. Investments typically last from six to ten years.

Venture capital firms generate income for themselves through management and performance fee collections. Fees are variable but are typically determined by the "2-and-20 rule," in which management fees total 2% of the worth of assets under management (AUM) and performance fees total 20% of investment profits. Those who work at a venture capital firm are called venture capitalists.

Further Resources

Title
Author
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News

Title
Author
Date
Publisher
Description
Swiftarc Ventures
December 14, 2020
www.prnewswire.com:443
/PRNewswire/ -- Swiftarc Ventures, LLC, an early and growth stage Venture Capital Firm, has entered into a strategic partnership with Nottingham Spirk, a...
Swiftarc Ventures
November 13, 2020
www.prnewswire.com:443
/PRNewswire/ -- Swiftarc Ventures, LLC an early and growth stage Venture Capital Firm focused on the next generation of Consumer and Consumer Health...

References

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