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Start Up Venture Capital


									Start Up Venture Capital

A start up venture capital is simply a type of private equity capital
that is being provided to fund start up companies with high growth
potential. In its most basic form, venture capital is being given in the
form of cash by people known as angel investors. In exchange for the
capital, the investors are given a stake in the start up company in the
form of shares.

Start up venture capital was once the domain of wealthy individuals and
families in the early 20th Century. There were notable families with
riches that many upstart businesses then relied on to help gather up some
start up capital for a business that shows some potential. In the United
States, there were wealthy families such as the Rockerfellers, Warburg
and the Vanderbilts who were noted for their investments on several
industrial and private companies during the early 1900's. During this
time, it was not yet known as venture capital but more commonly called as
developmental capital.

It was not until after World War II that venture capital investments
ceased to be a realm of wealthy families. Sometime in the 1940's, venture
capital firms were set up in order to help and encourage the private
sector to invest in businesses. The firms initially targeted returning
GI's. These venture capital firms were the first of its kind then in that
they helped raised capital funds that did not come primarily from the
wealthy families.

Technology And Venture Capital
In the subsequent years, venture capital firms focused more and more on
investing in technology companies. It was s time when many technological
breakthroughs in electronics, data processing and the medical field were
rampant. The late 60's up towards the 70's saw many venture capital firms
eyeing investments mainly in technology. It was also during this time
that venture capital became almost synonymous with technology finance
because on its perceived focus in terms of investments.

80's Hardships
The venture capital industry first saw its successes bore fruit during
the 70's and the 80's. With many start up technology businesses sprouting
up and became big companies. This led to many other capital firms
venturing out into trying to provide start up funding to new businesses
that show high potential for growth. The growth of the venture capital
market itself suffered as more and more players entered into the fray.

With many venture capital firms increasingly looking for that next big
thing, the risks that they took to determine the potential of certain
start ups for growth and success somehow also increased. Many venture
capital firms suddenly found themselves facing declining returns that
didn't seem to go well with their expectations for some of the start ups
they funded.

Along with the competition, occasional dips in the overall business
climate also affected the returns for most of the venture capital firms.
It even worsened during the stock market crash in 1987 where many IPO's
collapsed. This also led many of the venture capital firms to close shop.

90's Boom
The 90's brought about a shake up in the venture capital industry that
eventually helped brought about much needed improvement. The boom came
when the Internet began making waves and the started the dotcom boom.
This led to many start up venture capital firms to provide funding to
many of the online domains trying to make their mark on the Web. It
stretched until the year 2000 when the dotcom bubble finally burst.

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