Venture capital in Europe - statistics & facts
As the highest risk form of private equity financing, venture capital (VC) provides funding for startups and emerging companies, usually in innovative technologies in exchange for an ownership stake or equity in the company. Because venture capital firms finance early-stage businesses, VC investments have a higher rate of failure than other private equity funding. The flip side to this high-risk model is that investors receive a high stake in the company and have a notable say in how the company operates. Generally, a small number of these startups will be hugely successful upon exit. The entire point of all private equity funding is that, at some stage, investors will generate a return on investment through either an initial public offering (IPO) or merger and acquisition (M&A) deal.
