chapter 1

• Venture Capital (VC) has five main characteristics:

  • A VC is a financial intermediary that invests investors' capital directly in portfolio companies
  • A VC invests only in private companies, which cannot be immediately traded on a public exchange
  • A VC takes an active role in monitoring and helping the companies in its portfolio
  • A VC's primary goal is to maximize financial return by exiting investments through a sale or an initial public offering (IPO)
  • A VC invests to fund the internal growth of companies
• A VC fund is organized as a limited partnership, with the venture capitalist as the general partner (GP) and the investors as limited partners (LP)
• VC is a type of private equity, investing in private companies whose securities cannot be traded in a formal market
• VC takes an active role in monitoring and helping portfolio companies, often serving on the board of directors and acting as recruiters and matchmakers
• A VC's primary goal is to maximize financial return by exiting investments through a sale or an IPO, distinguishing it from strategic investing by large corporations
• VC's goal of "internal growth" means using investment proceeds to build new businesses, distinguishing it from other types of private equity
• Venture Capitalists' activities can be categorized into investing, monitoring, and exiting
• In the Philippines, the venture capital industry is relatively small, investing primarily in family-run businesses
• Challenges in the Philippines' venture capital industry include maintaining a venture capital presence, limited IPOs as an exit strategy, and lack of funds from institutional investors