Essay on venture capital

16331 Words Mar 11th, 2014 66 Pages


Venture capital, a financial innovation of the twentieth century, is a long-term liquid investment, which can be in the form of equity, quasi-equity and sometimes debt in new and high-risk ventures. Venture capital became better known after the famous legend of Apple Computers, which started out in the US in 1977 with the capital firm, Arthur Rock & Co. Apple Computers then made it to the Fortune 500 and Arthur Rock & Co. attained height in Venture capital industry. However the success of Venture Capital in USA stimulated world countries to practice on Venture capital.
A number of technocrats are seeking to set up shop on their own and capitalize on opportunities. In the highly
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1. Primary Data: Interview with Mr. Kiran Nadkarni, Founder of Kaati Zone.
2. Secondary Data: It includes data collected from websites of SEBI, IVCA and various periodicals and journals.


In the fifteenth century, Christopher Columbus sought to travel westwards instead of eastwards from Europe, to reach India. His farfetched idea did not find favor with the King of Portugal, who refused to finance him. Finally, Queen Isabella of Spain decided to "fund" him for his venture and thus evolved the concept of Venture Capital.

The modern venture capital industry began taking shape in the post–World War II.

The earliest members of the organized venture capital industry had several role models, including these three:

American Research and Development Corporation, formed in 1946, whose biggest success was Digital Equipment. The founder of ARD was General Georges Doroit, a French-born military man who is considered "the father of venture capital." In the 1950s, he taught at the Harvard Business School. His lectures on the importance of risk capital were considered quirky by the rest of the faculty, who concentrated on conventional corporate management.

J.H. Whitney & Co also formed in 1946, one of whose early hits was Minute Maid juice. Jock

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