What is venture capital?

Venture capital (VC for short) can also be translated as venture capital.

According to the definition of private equity investment fund by American Venture Capital Association (NVCA), private equity investment fund can be divided into two levels: broad and narrow, in which the broad private equity fund includes venture capital fund; Private equity investment funds in a narrow sense do not include venture capital funds.

Therefore, venture capital is one of the broad categories of private equity investment.

Specifically, venture capital refers to the early equity investment in emerging small and medium-sized enterprises with high growth potential and great competition potential, including:

Searching, incubating, sowing or early investment;

Investment in the initial stage, product prototype stage or company expansion stage;

Use bonds with similar stock characteristics for mezzanine or structured financing;

Mature companies invest before listing.

The main purpose of this kind of venture capitalists is to expect the rapid growth of enterprises and bring high value-added benefits to enterprises. Investors often quit after the completion of the start-up stage to ensure their capital appreciation, and then make a new stage of capital investment. For example, IDG Technology Venture Capital Fund, which has invested in Tencent, Sohu, Tudou and other well-known enterprises, is a very typical and successful venture capital, that is, a high-tech innovative enterprise with great growth potential in the investment market.