Venture capital industry has for over the decades experienced growth and annual flows into their funds have expanded beyond imagination and most visible new firm has been backed by venture capital funds. This growth has led to increasing attention to venture capital industry from the press and others policy makers.
Despite the attention, misconceptions persisted about the nature and the role of venture capitalists and one of the claims encountered is that venture capitalists are purely passive financiers of entrepreneurial firms who are unlikely to add value.
The following represents the cycle of the venture process presented in point form,
• The raising of a venture fund,
• Proceeds through the investing in,
• Monitoring of and adding value to firms;
• Continues as the venture capitalist exits
• Successful deals and returns capital to their investors
• Then it renews itself with the venture capitalist raising additional funds.