Venture Capitalist (VC)

A venture capitalist, sometimes referred to as a “VC,” for short, is a person who invests in startup companies. The venture capitalist is usually a professional investor associated with a group of other similar professional investors in a formal VC firm, and the investments of the venture capitalist are made through the VC firm. The firm, in turn, then manages VC funds that they offer to their wealthy, private money clients the opportunity to invest in. The Funds, in turn, hold a portfolio of high risk, high return investments from which the investors seek to receive large returns. The VC’s also seek to share in the returns, of course, and typically charge a management fee for managing the funds on behalf of the investors. Funds are often focused on different sectors or areas, and thus classified as a particular type of fund – for example, an emerging markets fund. VC’s often make investments in startup companies following on the heels of angel investors, who, in turn, are wealthy private individual investors not always affiliated with VC firms. Angel investors will make the initial investments in the company, and then wait for the larger money of the venture capitalists to follow along in a series of rounds, often referred to by their series letter – for example, series a, series b, series c, and so on.