Where did the name venture capitalist come from?
I misunderstood the name Venture Capitalist when I first heard it. How did the name for that career come about, and what exactly does it mean? I'd like to know in case it comes up in an interview #finance #venture-capital
Venture capital is money (capital) provide to a young business (a new venture) to help the company grow. When the company is so young that it doesn't generate enough money to hire employees, buy equipment, or start manufacturing a product, this venture capital can be quite helpful. A person working for a venture capital firm can also provide advice to the management of a young company on how to design a product or service, how to find suppliers and customers, and other basic elements of how to run a business.
They typically take an equity stake in the target firm and then mentor it as well towards a growth path. There are many institutional and individual venture capitalists, including Mark Cuban, Soft bank etc that make such deals.