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Definition of Venture Capital


   

Definition

A form of financing for a company in which the business gives up some level of ownership and control of the business in exchange for capital over a limited time frame, usually 3-5 years. The exit of the venture capitalist can be an IPO, a merger or acquisition, or a buyout of the investor. Most commonly the investment takes the form of private stock in the venture or a legal instrument which can be converted to stock. Investments range from $500,000 to $5 million, although there are occasionally investments for as low as $50,000 or as high as $20 million.

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