FREE online courses on Venture Capital Funding - The Venture Capital Industry - Types of firms

 

·         Most mainstream venture capital firms invest their capital through funds organized as limited partnerships in which the venture capital firm serves as the general partner.

 

·         “Private independent firms” are the most common and have no affiliations with any other financial institution. 

 

·         Some firms often succeed by creating synergies between the various companies they have invested in; for example one company that has a great software product, but does not have adequate distribution technology may be paired with another company or its management in the venture portfolio that has better distribution technology.

 

·         Venture firms may also be affiliates or subsidiaries of a commercial bank, investment bank or insurance company and make investments on behalf of outside investors or the parent firm's clients.

 

·         Still other firms may be subsidiaries of non-financial, industrial corporations making investments on behalf of the parent itself. These latter firms are typically called “direct investors” or “corporate venture investors.”