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